New Year, New Possibilities
Want to know the 10 markets with the best overall real
estate prospects for 2019? Urban Land Institute and PwC recently named the
areas below in the 40th edition of Emerging Trends in Real Estate. The firms interviewed
750 real estate professionals and surveyed an additional 1,630 on a wide
variety of real estate issues and trends to arrive at the decision.
- Dallas-Fort Worth
- New York-Brooklyn
- Raleigh/Durham, N.C.
- Orlando, Fla.
- Nashville, Tenn.
- Austin, Texas
- Charlotte, N.C.
- Tampa/St. Petersburg, Fla.
Construction’s Digital Future
Global construction technology, or con-tech, is becoming
increasingly attractive to investors, according to The State of Construction
Technology, a recent JLL report. The field is ripe for growth; the report notes
that the construction sector is one of the least digitized, and $1.05 billion
was invested in con-tech startups in the first half of 2018. The largest number
of startups focused on collaboration software, offsite construction, and
project management, but others focused on areas such as financial management;
3D visualization and drones; and aerial intelligence.
Although e-commerce occupiers need larger buildings, the
category was actually fourth in the number of 1,877 transactions for industrial
properties over 100,000 sf, from October 2017-October 2018.
New Luxury Rentals on the Rise
Out of 1,600 large-scale U.S. apartment buildings
constructed in 2017, 79 percent — 1,270 units — were classified as high-end
properties, and by 1H2018, the percentage rose to 87 percent.
Coming Up in Retail Centers?
Retail experts identified five retail-center trends to watch
Mixed-Use and Retail event in Houston
this past October.
- Specialty-focused retail destinations with mixed-use centers
revolving around one theme, such as health or food
- Downsized grocery stores, resulting from increased home
grocery delivery from warehouses
- Smaller-scale mixed use, thanks to the rising cost and shrinking availability of
- Better understanding of Middle America’s
shopping patterns, rather than a focus on high-end or trendy shopping habits
- Restrictions and rules on marijuana sales or retailers, as
more states legalize cannabis
Office Absorption High in Tech Center Cities
Industrial — While the U.S. big-box market continues to
grow, Colliers noted one area where developers need to be alert. Because
e-commerce distribution centers have higher employee counts, as well as
seasonal spikes, these occupiers “can
require two to three times the amount of labor as a traditional distribution
company says in its recent Big Box Market Report. This means that extra
scrutiny for available labor will be necessary in the site-selection process.
Multifamily — Apartment communities across the country are
incorporating more pet-friendly features into their properties; amenities
include enclosed dog parks, walking trails, and even pet pools. “Closing ratios are higher than the
normal apartment ratio where there are no pet amenities, and dollar for dollar,
rents tend to be higher as well,”
Lynn Owen, COO of TruAmerica Multifamily, told GlobeSt.com.
Office — Office building parking solutions are an ongoing
concern as parking costs increase and companies increasingly embrace coworking.
The flexibility of coworking can make parking needs difficult to determine,
says Allwork, particularly in suburban areas. While urban businesses can depend
more heavily on mass transit, suburban landlords may need to explore
alternatives such as carpool incentives or discounts for ride-sharing services.
Retail — A three-level, 120,000-sf athletic resort is
planned to open this year in a space once occupied by a J.C. Penney store that
anchored Southdale Center in Edina, Minn. CoStar reports that the project is
being developed by Simon Property Group and Life Time, a Minnesota company that
operates 138 fitness centers throughout the country. The resort will include a
rooftop restaurant and beach club, a pool,
a cafe serving healthy fare, a spa, and a salon.