The publication Emerging Trends in Real Estate 2020, released by the Urban Land Institute (ULI) and PwC, reports that U.S. real estate remains a favored asset class, as economic uncertainty and societal changes have resulted in successful industry adaptations to space design, development and business operations.
- "Throughout this period of extended economic growth, real estate development has been dominated by creative mixed-use projects that have revived many urban areas,” said ULI Global Chairman W. Edward Walter. “Going forward, those who continue to innovate with spaces that can be easily be repurposed as cities evolve will have a competitive edge. Staying ahead of change means being flexible and adaptable.” (ULI news release, Sept. 19)
- Trends highlighted in the report include:
- ESG – There is a growing commitment to the tenets of ESG (environmental, social and governance) principles among corporations in general and real estate in particular. Sustainability evaluation is becoming a checklist item for institutional investors domestically and worldwide. Strong interest by millennials in environmentally and socially conscious business practices is a major factor driving this trend.
- Infrastructure – Real estate professionals waiting for a federal solution to America’s infrastructure needs are looking to states and localities that are committed to improved infrastructure as a foundation for economic growth.
- Housing Affordability has reached a crucial point, even in markets that previously boasted of low-cost housing. There is a rise in co-living arrangements, among older as well as younger generations.
- Hipsturbia – The live-work-play districts that spurred 24-hour downtowns in the 1990s has spread to many suburban communities, which are seeking to become hip destinations, or “hipsturbs.” The key to success: transit access, walkability, and abundant retail, restaurant and recreation options.
- Technology – Property managers are turning to technology solutions for productivity enhancements and improved operational efficiency. Demand is also increasing from occupants and capital sources for technological sophistication across all sectors.
- The report also notes that the industrial/distribution sector continues to be ranked highest for investment and development prospects, reflecting the impact of e-commerce and rising demand for storage and delivery facilities. Multifamily and single-family housing are also highly favored, as housing needs continue to change for millennials and baby boomers.
- Societal trends and public policy issues affecting commercial real estate are also featured in an Oct. 1 interview with Roundtable President and CEO Jeffrey DeBoer (left in photo above) during an episode of the podcast, “Through The Noise.”
- In a wide-ranging, 50-minute interview, DeBoer explains The Roundtable’s role in industry efforts in Washington, including terrorism insurance, affordable housing needs, energy efficiency and opportunity zones.
- DeBoer states in the podcast, ““Whether rural or urban; multifamily or office … we're working together as an industry and talking about how development projects contribute to jobs and local communities. Commercial real estate provides 70% of local budgets to pay teachers and build roads. Healthy, strong real estate is good for everyone and helps every part of our society.”
Public policies affecting CRE will be discussed during The Roundtable’s Fall Meeting on Oct. 30 in Washington, where guests will include U.S. Housing and Urban Development (HUD) Secretary Ben Carson.
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