The Urban Land Institute (ULI) held its Fall Meeting in Boston on October 8-11. ULI and PwC released the “Emerging Trends in Real Estate 2019” report at the meeting, which presents outlooks for the $7 trillion real estate and land use marketplace based on survey results from over 2,400 ULI members.In its 40th year, the report identifies the top 10 markets for investment. This year, seven of the top markets are in the South. Like last year, Dallas/Fort Worth was highest on the list. For the first time in the publication’s history, Brooklyn, Orlando and Tampa made the top 10.
Other major real estate trends discussed in the report include:
- Retail Transformation: Retail is not dead, but it’s changing. We are seeing major shifts in consumer spending habits drive demand in the logistics real estate sector.
- Disruptors Affect Real Estate: Technological disrupters—such as ride-hailing services, public bike- and scooter-sharing apps, and the influx of package deliveries—are crowding streets, sidewalks and lobbies with an immediate effect on real estate needs and management.
- Amenities and Innovation: Increasing and varied amenities—such as electric car-charging stations, workout facilities and cafes—need to be offered, even in distribution centers and logistics facilities, to attract tenants. Landlords are also engaging customers by reducing pain points through vendor-referral services and simplified leases.
- Logistics Locations Driven by Consumer Demand: The need for logistics facilities locations near consumer centers is rising alongside consumer expectations for fast delivery and inventory choice.
Mark Hansen, Prologis managing director and investment officer, represented the company at a press briefing on the report’s findings. When talking about retail transformation, he explained e-commerce providers need three times the logistics space as traditional retailers, and they want locations close to their customers. These factors, stemming from consumer demand, play into Prologis’ purposeful location strategy and presence in high-consumption markets.
Mark has worked on multiple projects, such as the Oakland Global Logistics Center, where public and private partnering was essential. He encouraged cities to merge public and private interests to form the most effective partnerships, explaining that grants are only available for these big infrastructure projects through private commitments. To get such efforts off the ground, Mark suggested developers start with incremental commitments and divide the work into smaller projects.
Gayle Starr, Prologis managing director of capital markets and a ULI governing trustee, sat on an expert panel to discuss the report findings along with Owen Thomas, CEO of Boston Properties, as well as a ULI trustee and foundation board member; Hessam Nadji, president and CEO of Marcus & Millichap; and Mitch Roschelle, partner at PwC.
Gayle noted that this is the first time the industrial real estate sector has seen a significant shift as a result of consumer demand. Cyclical spending and consumers wanting fast delivery and varied goods are fueling record demand for industrial real estate. As affluent consumers cluster in urban areas, location is more important than ever before, playing into Prologis’ strategy of being near population centers.
At the forefront of Prologis’ efforts to advance women in real estate, Gayle is also on the executive board of ULI’s Women’s Leadership Initiative (WLI). The mission of WLI, formed in late 2010, is to raise the visibility and number of women leaders in ULI and the real estate industry.
Prologis has been involved as a sponsor and supporter of WLI for the past four years and has given scholarships to 10 female members in recognition of their contributions to ULI and commitment to real estate and land use issues. Prologis hosted a breakfast for the talented scholarship recipients on Tuesday, October 9.
Learn more about the ULI Fall Meeting.