This week, Criterion.B attended the Urban Land Institute’s Emerging Trends in Real Estate 2016 event. Speaker Kathleen Carey (ULI Executive VP & Chief Content Officer) discussed ULI’s annual research report, surveying 1,800 real estate leaders and ranking 75 cities to identify the most noted trends in real estate for the coming year.
Let’s take a look at some of the emerging trends in real estate:
Why 18-Hour Cities Are the ‘New’ New York
Everyone knows the 24-hour gateway cities: the New Yorks, the Tokyos, and the San Frans of the world. These cities never sleep — always bustling with business, nightlife, and transportation. But the rise of the 18-hour cities has added promise (and 6 hours of sleep) to the smaller, less dense metropolitans.
Last year’s front-runner markets like New York City, Houston, and Washington D.C. have fallen out of the top 10.
The so-called 18-hour cities — Atlanta, Nashville, Portland, Dallas — have deftly taken their place. Consequently, survey respondents cite the cost of doing business and cost of living as the driving factors.
What’s the draw of an 18-hour city? Keynote speaker Carey explains that 18-hour cities are more affordable, yet still offer the urban experience.
“Millennials want nightlife, retail, restaurants, offices, and residencies all in one walkable area,” Carey said. City planning and real estate are responding with a rise in mixed-use development to accommodate the various facets of an urban playground.
Not only are these cities more desirable, but the potential investment returns and growth in these markets are looking extremely promising.
Why We Shouldn’t Give Up On the Suburbs
According to ULI’s America in 2015 report, in the next five years, 48 percent of all adults and 73 percent of millennials will move.
The question, though, is where will they move? As more millennials settle down with kids, they are predicted to drive the movement back to the suburbs.
According to Carey, millennial lifestyles are guiding development trends in the suburbs. “They want neighborhoods that mimic the urban core,” Carey said. “The new suburbs will combine more space and affordability with the treasured amenities that millennials love from city life.”
Mixed-use properties, that bear elements of walkability, entertainment, and accessibility, bring the urban lifestyle to suburban neighborhoods.
“Affordability and space, will become the priorities over the next few years, and the places that can offer these along with urban amenities will be the real winners.”
But remember, this isn’t the suburbs of their parents; it’s a hybrid of the family-oriented suburban style with the experience of urban amenities.
Why Office Space Is the Barometer for Change
Innovation in office space is not only impacting tech-startup companies. In fact, according to the ULI Emerging Trends in Real Estate report, offices are a barometer for change. Carey discussed how traditional styles of office layouts hinder necessary interactions, such as open-floor collaboration and tech-connected meeting rooms.
“They need to be set up for the way people work today,” Carey said. “And they’re finally starting to.”
Companies like Google and Facebook, for example, have inspired a powerful company culture, essential to productivity, and it starts with smart design. Not all companies can have a coffee shop or game room, but maximizing co-worker encounters will improve culture. It starts with derailing the isolating cubicle design and getting creative — stand-up desks, couches, co-working spaces.
This emerging trend in office space will rely heavily on progressive architects to pursue forward-thinking models. Again, we see the millennial lifestyle acting as a catalyst for multifamily development trends.
Why Parking Infrastructure May Become Useless
According to the AAA Foundation for Traffic Safety, the number of high school seniors with driver’s licenses decreased by 12 percent from 1996-2010, and that number is still declining.
The parking discussion brings up issues of traffic congestion, carbon monoxide emissions, and lack of public transit. Cities adopting alternatives for driving everywhere are turning to bicycles, sidewalks, and public transportation instead.
Imagine the future for parking when there are less licensed drivers, more walkable cities, and fewer cars on the road.
Cities like Los Angeles, for instance, are opting for change. Ideas to convert and reuse parking structures is churning in the minds of innovative city planners. These 18-hour cities attract both the older suburban-dwelling millennials and the younger urban-dwellng ones while adding in factors like less parking infrastructure, innovative office spaces, and New Urbanism themes.
Emerging Trends in Real Estate: Where Does Dallas Fall?
Curious where Dallas falls on a national scale? Dallas-Fort Worth was ranked the No. 1 market for homebuilding, the No. 2 market for real estate investment, and No. 3 market for multifamily development.
To read about all of the emerging trends in real estate discovered through ULI’s extensive research, download the ULI Emerging Trends in Real Estate 2016 booklet.