Looking ahead to the future of the facilities management (FM) industry, it's essential to anticipate the trends and opportunities that will shape the landscape in 2025. By examining the past year's developments and understanding the evolving needs of businesses and facilities, we can better prepare for what lies ahead.
By Annika Tourlas
Where We've Been
Sustainability
In recent years, organizations have recognized the importance of incorporating eco-friendly practices and reducing their carbon footprint.
These new practices are often driven by regulatory compliance, which varies from state to state, and investor expectations aimed at working toward operations benefiting the customer, organization and the earth.
"So over the last five years, leading up to 2024, we witnessed firsthand how the integration of ESG (Environmental, Social, Governance) practices has become a top priority for organizations, starting with the corporate strategies and now filtering down to facilities management," said Vice President of Sustainability at Retail Council of Canada Michael Zabaneh.
Corporate leadership has placed pressure on facility managers to help identify their key environmental objectives, which commonly include:
Energy-efficient operations
Renewable energy operations
Waste-reduction operations
While successful implementation of the chosen goals and regulatory standards can improve day-to-day operations and customer satisfaction, an investor' and credit agencies' perception of ESG practices has been a significant driving factor.
"When they're thinking about who to invest in and where to invest, they're looking at ESG performance, and that helps make their decision on whether or not they're going to invest in a particular company," said Zabaneh
Achieving these goals and standards is a challenging feat. FM experts provide corporations with the answers to how and when these changes can be made. Yet their expertise alone isn't enough. Data collection and analysis is a new tool that FMs use to influence sustainability decisions.
Real Estate & Economics
The lasting impacts of the COVID-19 pandemic played a prominent role in organizations' physical storefront performance, resulting in the closure of many traditional merchant locations.
Despite being four years out of the pandemic, many organizations are still closing more locations than they're opening. However, Garrick Brown, Vice President of Real Estate Intelligence at Galilee Real Estate, found that 2024 marked an aggressive period of growth for unique storefronts, which include:
found that 2024 marked an aggressive period of growth for unique storefronts, which include:
Fitness clubs/gyms
Restaurants
Med-spas, offering services like Botox
Veterinary clinics
Urgent care clinics
Luxury Retail
Yet it's essential to recognize that these trends don't signify an economy-wide boom and could prompt difficulty for established multi-site facilities looking to prevent mass store closures.
Brown encourages people to view the economy as a long train navigating hills and valleys, with the engine representing interest rates, and the very back end being real estate.
"The front of the train right now, I would say, is coming out of a valley," said Brown. "The back of the train is actually still going into the valley, and somewhere toward the back of that train is retail sales."
Technology
Since COVID-19, consumer expectations have skyrocketed, requesting an omni-channel experience. From luxury retailers to discount retailers, locations, websites and third-party delivery companies must reflect consumer values and desires.
This heightened demand for more is difficult to keep up with, especially using outdated operation models. That's where leveraging modern technology comes into play.
"Facilities teams and businesses are having to do more with less," said Sid Shetty, Chief Business Officer at Service Channel. "Our customers are leveraging more technology, looking to AI to help operationalize or automate without having to use human capital."
So far, brick-and-mortar businesses have already implemented robotics and AI to keep up with the consumer's demands, such as:
AI drive-thrus
Robotic packaging
Front-of-house kiosks
Automated grocery-shopping experiences
This automation extended into healthcare sites, as well. Kenneth Jones, Director of Facilities for Heartland Dental, integrated technological advancements in a variety of ways, including computerized maintenance management systems (CMMS).
However, with these new systems entering the marketplace, FM experts must evaluate the impact of training a new system, especially for healthcare organizations where patient care may be affected.
"So, when we add programs, software and things like that if they're impeding their actual job, then we're not helping out," said Jones.
Where We're Going
Sustainability
With a continued push for increased ESG practices in 2025, facilities managers will be expected to enhance data reporting mechanisms and systems. Transitioning toward sustainable operations is ideal in many ways. However, cases supported by data must be made to support these decisions from a financial perspective.
"I think you're going to continue to see that pressure around investor expectations, more pressure on performance and companies to report their performance, whether it's for a global platform, a sustainability rating agency, or ESG ratings, that's going to continue to be a huge driver," said Zabaneh.
However, investors aren't the only ones driving further change in 2025. Customers are demanding more accountability, expecting brands to hold high environmental and social standards. With that, organizations are rushing toward change – change of high-level operations and standard FM functions, like equipment upgrades.
"I think that as these companies evaluate their investment decision to upgrade HVAC equipment, they'll find that there are cost-saving opportunities with energy efficiency as well, or recycling or waste reduction," said Zabaneh. "There's a lot happening."
The future political landscape could put a wrench in or disrupt the progress toward eco-friendly practices, and with that, navigating the trends to come can be difficult. However, by remaining plugged in and attentive to industry-wide sustainability initiatives and federal action facilities, managers can be better prepared for the requests that may arise.
"I think the most important thing is they need to be adaptable," said Zabaneh. "Because we're heading into a world that is changing."
Real Estate & Economics
Despite the recent economic ebbs and flows, like raised inflation, consumers have continued to show up and spend.
"In 2019, Americans owed $840 billion in credit card debt; today, they owe 1.1 trillion," said Brown. "To make it worse, the credit card debt they owed in 2019, on average, was an interest rate of about 17%, today, it's at 23%."
With American consumers having a significant amount of credit card debt at high interest rates, 2025 may bring forth a climbing amount of personal bankruptcies.
However, with heightened credit card debt and the federal government beginning to lower interest rates, businesses may have the opportunity to invest in and expand job opportunities. Ultimately, this gives Americans a better chance to work through debt and suggests that retailers may have a higher-performing year than originally anticipated.
Suppliers should look toward diversification to take advantage of the current economic landscape. What new types of tenants are growing in the marketplace? For multi-sites themselves, 2025 may be harder to navigate, especially with the incoming administration's tariff proposals and the surge of retail storefront closures.
“The economy entering 2025 will be at an inflection point,” said Brown. He emphasizes that changes with the administration in the new year may have fluctuating impacts for business and consumers alike with topics such as tax cuts, tariffs, and deportations being promised, “… the economy could swing either way in 2025”.
For multi-sites looking to avoid mass closures and work toward growth during the new administration, Brown suggests constantly evaluating two factors – what you're selling and consumer behaviors.
“Retailers have a life cycle that isn’t just about the economy, but it is about how well they navigate the shifting preferences of consumers,” said Brown. "But there's always winners and losers ... We'll have to wait and see."
Technology
While AI was implemented at various locations and storefronts globally in 2024, training was still underway, and conversations were still being had on whether these processes were adding or taking away from the consumer experience.
However, with increased labor shortages going into 2025, companies must understand how consumers and staff react to and plan to interact with automated processes.
"AI is not going to replace the people, but what AI will, I believe, do is help streamline processes and make people able to work on more strategic versus tactical things. That's really where I see this next year or so going," said Jones.
Further integration and testing of new processes include:
Data collection
Automated emails
Drone deliveries
Robotic assistants
Physical spaces catered to online orders
"Technology and data will be the best tool in your tool belt to stay ahead of the game," said Shetty. "We cannot, as an industry, put our heads in the sand and hope that things will be okay. We have to stay ahead of it."
To ensure teams can adapt, Jones hires individuals eager to leverage incoming advancements, like AI systems—ultimately, understanding that their work in FM impacts patient care.
“Hire team members that are excited about technology,” said Jones. “I’m very fortunate that I do have team members that are excited about technology and how we can do things better.”
As we look forward to the new year, we must reflect on our past as an FM industry, from all perspectives, to better understand where we’re going. While these predictions aren’t set in stone, we are keen to see where 2025 will take us and how we can create a better experience for everyone, from customers to executives.
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