A Look at 2015
While it’s been out for a while, I wanted to touch base on what the 2015 Emerging Trends in Real Estate Report. It’s part of the reason I have an eye on the Millennial Generation and even Generation Z -- those just now entering college. In the 2015 report – published by PwC US and the Urban Land Institute – commercial real estate continues to thrive on strong fundamentals and heavy investor interest.
Some of the top 10 emerging trends for the year, include:
The 18-hour city
The “urbanization of America” has given life to cities that were once 9 to 5. Downtown transformations, notes the PwC site, have combined the key ingredients n housing, retail, dining, and walk to work offices in order to generate an urban core, giving rise to investment and development opportunities. Cities across America will slowly copy the walkability of New York, Washington, D.C., and Minneapolis.
Renters Among Millennial Generation
Another trend we’ve seen are millennial kids putting off buying a home, opting to rent. Apparently, they’re a bit scared about what happened to their parents at the heights of housing. The trend of renting is expected to continue until at least 2020.
America is in need of a facelift. We all know this very well.
Infrastructure needs updating. Aggravating, holey roads, bridges, transit, water systems, the power grid, communications networks… you name it. And it desperately needs updating. Many of these were last updating about 50 years ago.
Roads that were built decades ago are falling apart. We’re all aware of them. It’s our reason for cursing and high blood pressure on our daily commutes to work. Gas pipes are crumbling. Close to 10% of our bridges are deficient.
As The Hill recently reported, “Our crumbling infrastructure is largely a result of a depleted Highway Trust Fund. Inflation and vehicle fuel efficiency have all slowly eroded the trust fund and created a $53 billion dollar deficit over the past seven years.”
“Recent statistics show that there is plenty of work to be done. According to the American Association of State Highway and Transportation Officials, 54 percent of America’s major roads are rated poor or mediocre, and one in four bridges needs significant repair or can’t handle today’s traffic. Additionally, the National Surface Transportation Policy and Revenue Study Commission recommended that America needed to spend at least $255 billion per year over the next half-century to keep our transportation system in good repair and make the needed upgrades.”
“A short-term transportation bill will not do enough to unlock the full potential of the commercial real estate industry or fix our outdated infrastructure. Some projects may get through this year but the most important investment decisions will be stuck in line, as investors and businesses wait idly for Congress to act. The success of the U.S. economy depends heavily on commercial real estate projects and commercial real estate depends on a consistent national strategy for infrastructure funding.”