Southern California's Remarkable Resiliency
January 21, 2021 3 Minute Read
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One year ago to the day, I was full of optimism for 2020 as a year of steady, continued growth in Southern California. I was looking forward to the opening of SoFi Stadium, completion of exciting new developments from Culver City to Burbank, new public transportation networks, and continued progress on the pressing issue of homelessness.
Needless to say, the year transpired very differently than we all had imagined. 2020 has been trying for our business and our region, but through these unprecedented challenges, I have been struck by the resilience that has characterized our collective response. As we enter the new year, I am again optimistic. But for 2021, that optimism is grounded in a confidence in Southern California’s remarkable and tested resiliency. In this blog installment, I want dive into that buzzword, which promises to be an essential tool for our region, our businesses and our industry in the coming year.
Let’s start with our own organization, which demonstrated its agility and endurance through countless new challenges, both large and small. The year underscored the importance of an adaptive organization that is able to creatively respond to new market conditions. At CBRE, we leaned into the constraints created during the pandemic by emphasizing cross-market knowledge sharing: in a world of Zoom, subject matter experts within the organization in New York were just as accessible as colleagues down the proverbial hallway. Some adaptations were imperfect substitutes, a culture of flexibility meant that we were willing to try new solutions – from new ways to onboard employees to virtual tours of available space. We were also shown that our focus on forward-thinking collaboration we had commenced a couple of years ago – flexible work environments, free-addressing, cloud-based storage systems, cross-functional training, and best-in-class broker technology tools – were helping us to support our professionals, guarantee continuity and support connectivity and productivity under most challenging and unique of circumstances.
Moving to a work-from-home model virtually overnight reinforced the speed with which we have been able to respond to new challenges, elevate our understanding of collaborative technology and boost creativity in facilitating first and foremost business continuity but ultimately also productivity as we overhauled and optimized processes that had gone stale. It’s trite to say that necessity is the mother of invention, but CBRE is leaving 2020 with novel operating practices, innovative technologies, and more nimble team members.
But any company’s success is greatly dependent on the environment it operates in. I have long written about the power of Southern California’s diversified economy, and the past year demonstrated that clearly. While the region saw decreased economic activity and rising unemployment, the balanced economy with a diversified set of drivers helped it avoid the severe impacts seen in other markets with economies more reliant on a single industry (e.g. San Francisco or Las Vegas). The strength of the Southern Californian talent base was foundational to the region’s resilience. In one sign of the durability of regional innovation, California business applications in 2020 jumped 2.6% over the previous year.
And while I will have been and will continue to talk about the creative economy in more depth in past and subsequent blog installments, I’d be remiss if I didn’t mention it here. Through past crises, the media and entertainment industry has long been a stable force for our region, and this year, the strong demand tailwinds for content creation suggest that once again the creative economy will be a primary propellant of the region’s economic recovery.
During a year in which social distancing restrictions made it nearly impossible for us to use the built environment in the way it was intended, the power of resilient real estate has never been more apparent. Properties that have embraced flexibility and alternative uses – whether it is in the retail space, industrial segment or in the office environment -- are and will continue to be among those that fare best. Therefore, emerging from the pandemic, we expect in the office segment the acceleration of the already underway shift towards creative and collaborative workplaces. Tomorrow’s office spaces – more so than ever - will be geared toward providing employees flexibility within their work environments -- whether it pertains to meeting space, casual collaboration, or focused time. Already, we are seeing office spaces adapt in these ways, a trend that we know will only quicken.
Last but certainly not least, the increasing and undeniable impacts of climate change in the coming years will create pressure on the built environment. Resilient buildings will respond to that reality by increasingly focusing on minimizing their environmental impact and having redundant systems to manage a range of environmental conditions.
So, whether it is the resilience of our diversified economy, the resilience in responding to operational challenges within businesses or the resilience of our built environment, Southern California answered the call to face the unprecedented challenges of 2020 and in the process created opportunities for us to thrive again in 2021 and beyond.