A National Perspective
As we enthusiastically move into 2016, our mood reflects the collective optimism enjoyed by many in the real estate industry. This opening quote from Emerging Trends in Real Estate 2016, recently co-published by the Urban Land Institute and PricewaterhouseCoopers, captures the spirit beautifully:
The next 24 months look doggone good for real estate.
Here is a brief overview of what our Emerging Trends colleagues are predicting for the coming year.
18-Hour Cities Will Continue Their Ascent
Austin, Portland, Nashville, Charlotte and a handful of other so-called “18-hour cities” are the markets on which to focus for 2016. A lower cost of living, coupled with an urban vibe and hip amenities, translate into a stronger growth potential for these markets than the 24-hour gateway cities such as New York and Los Angeles which led the post-financial crisis real estate recovery.
Work Environments Are Up For Grabs
As strengthening employment numbers buoy the office sector in most metro areas, the “re-thinking” of what constitutes an office will continue. Space per occupant, amenities, function and design are all in play. Co-working spaces will continue to attract even greater numbers of entrepreneurs, “knowledge” and “gig” workers in key markets throughout the country.
Middle Income Housing Is The Way To Go
The biggest opportunity in the housing sector will be providing affordable housing for the “excluded middle” of American households. The upper end is saturated with product; the heavily subsidized low end is complicated, low-margin and politicized. Those who can satisfy the needs of millions of middle income households for mid to higher density housing in both suburban and urban locations will hit the bull’s eye.
Plan Your Parking For Change
Emblematic of the parking planning conundrum is that Yankee Stadium’s 50,000 seats are served by only 9,000 parking spaces, but less than half of those spaces are typically used. Given the advent of driverless cars, the shift toward walkability and mass transit oriented development, and the steep decline in drivers’ licenses among Gen Y’ers, conventional parking ratios need to be re-evaluated. New developments would be well served by temporary parking facilities that can be transitioned to other uses over time.