2015 MegaTrends Impacting Society & The Global Economy – via Urban Land Institute and PwC



Super informative study identifying mega lifestyle trends impacting society as well as businesses and city and government services.  Trend highlights include accelerating urbanization, demographic shifts, and the impact of the exponential expansion of technology.

The 18-hour city comes of age

The urbanization of America has given life to cities that historically had been active only from 9 to 5. Downtown transformations have combined the key ingredients of housing, retail offerings, dining, and walk-to-work offices to generate urban cores, spurring investment and development and raising the quality of life for a roster of cities.

The changing age game

The millennials are an even larger demographic cohort than their parents, the baby-boom generation. Looking beyond the millennials, the report anticipates further industry changes resulting from the emergence of the smaller “generation Z.” Planning for a nation with lesser household formation, fewer new consumers, and a meager number of workforce entrants is the challenge ahead for a real estate industry with its eye on the 2020s. The report also notes that baby boomers—as workers and retirees—will continue to have a significant impact on real estate development and investment for at least two more decades.

Labor markets are trending toward a tipping point

The report states that forward-looking businesses are waking up to a realization that while people were worried about the “jobless recovery,” longer-term labor market trends are moving in exactly the opposite direction. Retirements will accelerate while the peak of millennial labor force entrants has already passed. Within a few years, the talk will be about labor shortages, not surpluses. The notion that “jobs are chasing people” will morph into a primary rule of the labor market.

Real estate’s love/hate relationship with technology intensifies

No form of real estate is exempt from the exponential expansion of technology. Technology is pushing change in space use, locations, and demand levels at an accelerated pace. It is now the norm to anticipate, strategize, and respond to new technologies before they are mainstream. E-commerce and crowdfunding are being viewed as an adaptation challenge as retailers become “omni-channel distributors” and e-tailers begin to open brick-and-mortar stores.

Event risk is here to stay

The concern about “event risk”—geopolitical risks, global unrest, and natural disasters—is troubling the minds of more and more people.

Infrastructure: time for the United States to get serious?For all the country’s vaunted technological innovations, the foundation of U.S. commerce is eroding. It is not just bridges and roads: since 2009, spending on education buildings and health care facilities—by both the public and private sector—is down by one-third in real-dollar terms.

Markets to Watch

A snapshot of the top five markets ranked by survey respondents and their outlook for each market follows.

1. Houston—Houston offers a significant amount of investment opportunity. Investors believe that the energy industry will continue to drive market growth, and that will support real estate activity in 2015. Houston was ranked number one in both investment and development expectations for next year; housing market expectations are ranked number two.

2. Austin—Interviewees like the industrial base, the appeal to the millennial generation, and the lower cost of doing business in Austin. The market was a top choice for both the office sector and the single-family housing sector and ranked number two for retail. Interviewees are also attracted to Austin’s diverse employee base, and the market is an example of “jobs chasing people.”

3. San Francisco—The decline from the top spot last year is due more to growth in the other cities than any identifiable flaw in the San Francisco market, according to surveyed participants. The strong local economy and improved domestic and international travel have made San Francisco the number-one choice for hotel investment in 2015. Respondents ranked the office market number three and the retail market number four.

4. Denver—Denver joins Austin and San Francisco as markets popular with the millennial generation. Denver’s exposure to the technology and energy industries has also attracted investor interest. The results of the survey put Denver retail at number five and office at number six.

5. Dallas/Fort Worth—Interviewees raise the possibility that despite being ranked lower than Houston, the market’s economic diversity could make the current growth rate more sustainable in Dallas/Fort Worth. The market continues to be attractive to real estate investors because of its strong job growth, which benefits from the low cost of living and of doing business. Single-family housing in the market is the highest-ranked property sector, and the market also has the highest-ranked industrial sector (number four) among the top five markets from this year’s survey.

Now in its 36th year, Emerging Trends inReal Estate®is one of the most highly regarded annual industry outlooks for the real estate and land use industry. It includes interviews and survey responses from more than 1,000 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers, and consultants.


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