Why write about the real estate market?
Because the real estate market is one of the most in-tune economic barometers for tracking important shifts in lifestyle, the workplace, retail and hospitality.
Here are 5 of the most compelling trends/opportunities coming out of real estate market.
#1: INDUSTRIAL WAREHOUSES AND DISTRIBUTION CENTERS
- E-commerce sales are booming and expected to reach $700 billion by 2022.
- Companies like Amazon and walmart.com need massive amounts of space, close to major population centers, to get products to customers within hours, not days.
- In the Atlanta area, 17 million square feet of new industrial space is currently under construction and in California’s Inland Empire, nearly 28 million square feet is being built.
- One of the most promising new opportunities: “mini-distribution hubs” (approx. 60,000 sq. ft) for last mile delivery.
Read on below for trends 2-5.
#2: THE REINVENTION OF THE MALL
Banks are anticipating a rise in mall defaults. Many are working with developers to convert retail properties into restaurants, health clubs, medical facilities, community colleges, movie theaters and office space.
- Ford Motor Co. recently moved 2,000 employees to an abandoned Lord & Taylor store that once anchored a suburban Detroit shopping mall (see below)
- 40% of mall renovation strategies involve food and beverage
- A 6-store strip center outside of Columbus, Ohio, was recently acquired by a nonprofit ministry and converted into a health clinic and food pantry.
#3: CO-WORKING SPACES
Co-working is anticipated to account for 30% of all office space nationwide in the near future.
- For example, in Philadelphia, WeWork, Benjamin’s Desk, and the Yard make up 527,000 square feet of total office space. Two additional projects are in the pipeline for 2018: Bond Collective at Suburban Station and Spaces in the old Hale Building.
What makes co-working so desirable is its flexibility and array of desirable amenities e.g. outdoor spaces, kitchens, special events.
In the meantime, most companies are shrinking their office footprints. Even law firms and financial services companies are cutting back their square footage.
#4: BABY BOOMERS OPT FOR CARE-FREE RENTALS
- Baby boomers are the fastest-growing group of renters.
- More than 5 million baby boomers are expected to rent their next home by 2020.
- Many boomers want the same amenity-rich, full-service buildings as millennials
- Between 2009 and 2015, the number of renters aged 55 or above rose 28%, while those aged 34 or younger only increased 3%
#5: TOP 10 AMENITIES BOOMERS WANT WHEN BUYING A HOUSE (Source: Yahoo Finance)
Grocery stores and restaurants top the list for buyers, ages 52 – 71.
- Fitness centers and walking trails
- Village squares
- Community high-speed internet and WiFi
- Recreational centers, and community-wide events
- This list is nearly indiscernible from what older millennials are looking for as they move out to “surban” environments.
- What boomers don’t want: golf courses – they ranked 49th among a list of 60 different amenities
The largest active adult community in the country, central Florida’s The Villages, reflects this trend:
- Over the past few years, developers have been repurposing golf courses into food-focused use cases like olive groves.