Research

Which Real Estate Assets will become obsolete?

After a tempestuous season

Let’s step back from real estate as an investment. What is real estate used for? Real estate is what economists call “real capital”. Real capital are inputs, such as land, factories or apartments, which are used to produce goods and services, such as food, cars or housing. Real estate assets, therefore, provide the amount, type and quality of space to house economic activity.  So, when consumers’ and end-users’ preferences change or when firms re-invent their ways of production or service generation, the demand for real capital – including real estate – can change.