Real estate’s optimism and new ideas for 2020

The future of work? Culture is core The 10 trends that will shape real estate in 2020
Curbed, September 12, 2019

The Urban Land Institute’s annual Emerging Trends report conveys a generally optimistic view of what the real estate industry will face throughout the year. While acknowledging economic and political uncertainties, respondents claim to have little worry about recession, great interest in a step-up in overall investing and eagerness to try new ideas.

The report, cited by Curbed, names 10 trends that will be important in real estate during 2020 — recession fears generally abating, abundant capital invested conservatively, no surprises in the prediction of top 10 markets, confidence in housing despite affordability issues, co-working and other collaborations, diversity inherent in hipsturbia, proliferation of senior housing, bottom-line returns on principled investment, tech adoption beginning to pick up and infrastructure investments to attract development.

Grant Thornton’s View Nichole Jordan
Lorraine White
Leader, Tax Services
Real Estate
Our clients seem to be deploying cash as quickly as it comes in. Some retail clients have changed their strategic plan over the last couple of years, sparking market activity with dispositions and acquisitions. Residential clients have been active, as well, and clients in hospitality are making significant investments. The fear of recession is still there, but only in the back of the mind. With interest rates remaining so low, I expect the market to continue to be active through 2020.

Community-oriented development does seem to be “eye-catching” to the new generation of workers. The popularity of co-working spaces has even spurred corporate America to mimic the floor plan, with open space work areas along with collaboration rooms. The market is prompting retail malls to convert space to residences, fitness centers, doctors’ offices, etc. A mall struggling to keep tenants could think about luring co-working-space companies, as well as other ideas such as elevating food courts to more upscale dining halls.

The “hipsturbia” concept resonates with what I see from an investment perspective. A number of our public REIT clients are investing directly in cities such as Hoboken, N.J., and the Santa Clara, Calif., area. Some of these investments involve buying blocks of retail and residential property to enhance the community with a “one-stop shop” for work, entertainment and home.

In technology, of all industries, real estate always seems late to the party, from internal system issues to a lack of investment in tech-savvy amenities. The good news is there’s a movement to invest internally in response to an age of innovation and expectation of greater efficiency. Investment in technology is likely to keep a slow and steady pace in 2020, and then speed up.

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