What the Future Holds
As 2019 looms ever larger on the horizon, we’ve shifted our focus to what’s in store for the real estate industry in the new year, based on the Emerging Trends in Real Estate 2019 report recently published by PwC and the Urban Land Institute.
Here’s a quick summary of what we have to look forward to.
Emerging Trends in Real Estate
1. Intensifying Transformation. Transformation on multiple fronts will characterize real estate in 2019, including changes in investment criteria, the deployment of technology and big data, and an accelerated reconfiguration of how real estate is used and occupied across all property types.
2. Deceleration of Growth. A declining labor force (the result of lower birth rates and sharply reduced immigration), coupled with low productivity have led to low levels of projected GDP growth and a projected reduction in the growth of real estate markets across the U.S.
3. Renewed Interest in Suburbs. As more and more millennials form family units and have children, there will be an increase in their interest in the suburbs around gateway and 18-hour cities. The U.S. Census Bureau reported that 2.6M people moved from principal cities to the suburbs in both 2016 and 2017 and that number is expected to increase.
4. Amenity Creep. No longer confined to the hospitality industry, hospitality-type amenities and services, such as yoga studios, cold storage rooms for food, and concierges, are being incorporated into retail, office and residential real estate with increasing regularity. Bare bones fitness centers are no longer enough, as tenants push for robust amenities packages.
5. Expected Best Bets. As e-commerce continues to gain speed, and industrial vacancy rates remain at historically low levels, the need for new warehouse and distribution facilities is expected to accelerate. The redeployment of under-utilized retail real estate is also expected to accelerate as reductions on the price of obsolete shopping centers will enable developers to more easily provide mixed-use solutions.