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In 2024, the economic landscape is set to be shaped by geopolitical conflicts and major elections, creating unpredictability in interest rates. Lower-demand assets, particularly urban offices, will experience rising cost pressures, likely resulting in significant asset transactions by Q3. Legislative efforts to reduce carbon emissions will maintain sustainability as a key focus. While AI adoption in real estate brings operational efficiencies, there are looming concerns about data breaches and potential industry consolidation.

Here are pivotal insights into the 2024 forecast from the JLL Spark team.

Arnaud Bouzinac, Growth Principal:
- Cautious optimism with hints of interest rate cuts from the US Federal Reserve in 2024.
- VC investment to remain subdued, requiring startups to manage operations on tight budgets.
- Corporations continue to demand a return to the office, presenting challenges and opportunities for tech companies addressing unused office spaces.
- Startups with rapid ROI, especially those focusing on energy efficiency and carbon reduction, expected to thrive.

Daniel Correa, Senior Associate:
- Anticipation of distressed asset sales in 2024 after a year of subdued CRE transaction volumes.
- Heightened focus on sustainability in the commercial real estate market, driven by regulatory mandates and tenant demand.
- Growth in e-commerce propelling demand for warehouses and distribution centers.
- Continued struggles for commercial office occupancy, with a flight to quality in major markets.

Danny Klein, Vice President of Innovation:
- Positive developments for the CRE industry as inflation decreases, mortgage rates improve, and the Federal Reserve adopts a looser stance.
- Renewed interest in sustainability technologies and increased spending on smart building technologies.
- An improved landscape for the CRE industry expected in 2024.

Laurent Grill, Partner:
- The impact of AI across various real estate sectors in 2024, focusing on property and asset management, smart buildings, real estate investment analysis, and marketplaces.

Raj Singh, Managing Partner:
- Challenging conditions for PropTech startups until the end of Q3 2024.
- Focus on delivering quantifiable ROI around asset management, energy, sustainability, and financial derivatives.
- Larger startups preparing for exits, with M&A likely prevailing over IPOs.

Sean Wright, Investment Principal:
- Anticipation of continued falling commercial real estate prices in 2024, reaching a bottom mid-year with central banks lowering interest rates.
- Sustainability as the dominant PropTech theme, attracting the majority of VC investment.
- AI becoming commonplace in PropTech by the end of 2024.

Sonia El-Sherif, Chief of Staff:
- Escalating demand for PropTech cybersecurity startups amid global geopolitical shifts.
- Anticipated growth in ConTech and PropTech in the Middle East and India.
- Rise of startups specializing in renewable energy solutions for data centers, supporting environmental sustainability and operational efficiency.

Original article posted on January 17, 2024