Businesses have always sought quality real estate, but “quality” space looks different than it did even five years ago – and, not surprisingly, varies across asset type, space function and industry.

“For some companies, quality is all about location or proximity to certain demographics, while for others it’s about sustainability, amenities, infrastructure or design. The recipe for success is a mix of these elements,” says Lorenzo Piacentino, JLL Consulting Services senior director, EMEA Lead, Portfolio Strategy.

Several factors have intensified demand for modern, well-maintained buildings in prime locations.

1. Economic volatility

With geopolitical tensions rising and a volatile global economy, investors, developers and tenants are skewing toward risk-averse and cost-conscious decisions. The most likely strategy to preserve value and maintain stable occupancy is linked to investing in core assets within established, high-demand locations.

It can be challenging to make major updates when your top priority is uptime. But one global tech manufacturing giant is rejigging their portfolio in phased approach that allows them to meet critical deadlines while reducing their footprint in aging facilities. The space reductions are balanced with an investment in the remaining footprint to enhance operational excellence and employee experience. Or, when relocating, the company targets newer assets in submarkets with better buildings, more amenities and proximity to public transportation.

2. Focus on talent attraction and retention

Employee expectations for the workplace are higher than ever. Competing for talent today requires not just a well-designed, conveniently located office, but a tailored experience to meet individual needs across generations and workstreams. Companies are amping up employee experience everywhere — in both offices and specialized facilities like research and innovation hubs, factories and data centers. But this goes beyond what happens when an employee is on board: talent sourcing has become a major factor in setting up or expanding space in a particular location.

3. Changing workplace needs

With office occupancy still rebounding from the early 2020s, business leaders know they need high-quality workplaces to ramp up in-person attendance and fulfill the new purpose of the office. Employees commute to the office for different reasons now. Some come to find connection and be inspired, while others need a productive place to work away from home’s distractions. That means offices need a variety of spaces for different types of work. 

4. Sustainability requirements

According to Climate Impact Partners research, locating in green, top-tier buildings is non-negotiable for the 45% of Fortune 500 companies that plan to be net zero by 2050, and for the many other companies striving to appeal to eco-conscious talent and customers. Not only are environmentally friendly buildings good for your rep among execs and shareholders, but energy efficiencies also provide tenants an avenue for savings on premium space leases. But there’s a big supply/demand issue: JLL research found that in 2025, at least 30% of market demand for low carbon space in 21 cities globally will not be met. This gap could exceed 70% by 2030.

5. Technological advances

Today’s office occupiers want smart buildings that support hybrid work, seamless connectivity and digital tools — often narrowing their options to newer buildings in central business districts and innovation hubs. Industrial tenants, too, need high-tech buildings to support increased uptime demands, use of robotics and same-day delivery logistics.

A global medical device manufacturer revolutionized its portfolio strategy by implementing a unified "One Team" approach across its expanding R&D and manufacturing footprint. Data-driven location decisions optimized site selection in competitive life sciences markets while centralizing management of 16.7 million square feet across 50 global locations. The implementation of performance dashboards comparing metrics across facilities generated $10.6 million in savings while supporting the company's mission to improve patient outcomes.

“The insights we can get from technology are supporting more efficient management of CRE,” says Steve Carlos, JLL Consulting Services senior director and AMER lead for Location Strategy. “This in turn is helping organizations optimize their footprints, cut costs to focus investments in core assets, and identify bold yet achievable targets. This helps CRE leaders identify immediate opportunities, while also informing their mid- and long-term real estate strategy.”

The flight to quality is impacting every property type. Supply has not kept up with demand for high-quality space, especially in the office market. The shortage creates challenges and opportunities for every market participant. Whether you’re a tenant, investor or developer, we’ve created a guide to help you navigate today’s market. Fill out the form to get tips to help you stay competitive in the real estate space race.

Whether your business is evaluating what to do with outdated properties or considering new locations for expansion, JLL Consulting Services can create strategies to position your portfolio for a future where quality matters more than ever. We bring you independent, objective and actionable advice informed by our global experience, insights and a bespoke location model. What’s more, we’ll connect you with our colleagues who can help bring the strategies to life.

Ready to take your portfolio and location strategies to new heights? Contact us today.