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Infrastructure 2014: Shaping the Competitive City

September 22, 2014 Comments off

Infrastructure 2014: Shaping the Competitive City (PDF)
Source: Urban Land Institute

How do real estate developers and investors — who could pursue opportunities regionally, nationally, or internationally—think about infrastructure? How do city leaders use infrastructure investments to position their cities for real estate investment and economic development? What role does infrastructure play relative to other economic development strategies? And are public and private perceptions and priorities aligned—or do they diverge, and in what ways?

To provide answers, researchers for Infrastruc – ture 2014 crafted a series of survey questions and asked high-level public officials and private real estate leaders to weigh in. Nearly 250 public sector leaders in local and regional government and over 200 senior-level private developers, in – vestors, and real estate advisers responded to the survey. About 86 percent of survey respondents were based in the United States, with the balance located in countries across the globe.

Nearly every city aspires to grow, and high- quality infrastructure—infrastructure that is well maintained, reliable, safe, resilient, and customer friendly—contributes to well-functioning, growth-primed cities—cities that attract new residents and retain existing ones.

Infrastructure—the physical facilities and systems that support economic activity—is often seen as a driver of real estate and development, especially by those who are in the business of pro – viding it. But do the people actually building and investing in real estate agree? The Infrastructure 2014 survey tells us “yes”—and a number of other interesting things as well.

Quality of Infrastructure is a Top Deal Maker or Breaker for Real Estate Investment and Development Decisions

April 9, 2014 Comments off

Quality of Infrastructure is a Top Deal Maker or Breaker for Real Estate Investment and Development Decisions
Source: Urban Land Institute

The quality of infrastructure systems – including transportation, utilities, and telecommunications – is a top factor influencing real estate investment and development decisions in cities around the world, sharing a high ranking with consumer demand in terms of importance, according to a survey of public- and private-sector leaders conducted by the Urban Land Institute and EY. The findings are included in the Infrastructure 2014: Shaping the Competitive City report, released this week at ULI’s 2014 Spring Meeting in Vancouver, British Columbia.

The survey, conducted in January 2014, reflects the opinions of 241 public sector officials and 202 senior-level real estate executives (developers, investors, lenders and advisors) based in large and mid-sized cities across the globe, with concentrations in the United States, Europe and Asia Pacific.

Among the combined group of public and private sector participants, 88 percent rated infrastructure quality as the top influencer of real estate investment and development. Demographic forces, including consumer demand and workforce skills, ranked as other top considerations determining real estate investment locations. Infrastructure quality was rated as the highest influencer by public leaders (91 percent) and second to highest by private leaders (86 percent). Consumer demand was viewed as the top factor by the private sector (90 percent).

Strong telecommunications systems (including high-speed internet capability) led the list of infrastructure categories that drive real estate investment, along with good roads, bridges, and reliable and affordable energy.

New ‘Bending the Cost Curve’ Report from ULI and Enterprise, Explores Solutions to Expand the Supply of Affordable Rental Housing

January 17, 2014 Comments off

New ‘Bending the Cost Curve’ Report from ULI and Enterprise, Explores Solutions to Expand the Supply of Affordable Rental Housing
Source: Urban Land Institute

Solutions to increase the supply of affordable rental housing are explored in a new report from the Urban Land Institute’s (ULI) Terwilliger Center for Housing and Enterprise Community Partners, Inc (Enterprise).

Bending the Cost Curve: Solutions to Expand the Supply of Affordable Rentals outlines factors that impede the development of affordable rental housing – causing the supply in many markets to fall far short of the demand – and offers specific, actionable solutions to overcome the barriers.

Nationally, there were only 6.9 million rentals affordable to 11.8 million extremely low-income renters in 2011, a supply gap that grew by three million renters between 2001 and 2011—and continues to grow. “In an era of growing demand and declining government financial support for affordable rental housing, it is more important than ever to deliver affordable housing as effectively as possible,” the report says. “Bending the cost curve will enable developers to deliver additional affordable rental homes and help jurisdictions provide more housing choices, meet the growing need for affordable rentals, and ensure that individuals and families across a range of incomes have a place to call home within the community.”

The report, released today in Washington, D.C. at the ULI/Carolyn and Preston Butcher Forum on Multifamily Housing, is based on a series of interviews and roundtable discussions co-hosted by the Terwilliger Center and Enterprise over the past 16 months with nearly 200 developers, financiers, and policy makers in ten markets – Chicago, Denver, Los Angeles, New York City, San Francisco, Boston, Houston, Minneapolis, Pittsburgh, and Seattle.

Conclusions drawn from the discussions formed the basis for the research, which is intended to help fill the void of material examining how to overcome regulatory barriers to affordable rental development, such as land use, zoning and building code restrictions, processing delays, and financing obstacles.

Strong Real Estate Fundamentals Seen for Asia in 2014, Says Emerging Trends in Real Estate® Asia Pacific 2014; Japan Regains Status As A Magnet For Investment And Development

January 15, 2014 Comments off

Strong Real Estate Fundamentals Seen for Asia in 2014, Says Emerging Trends in Real Estate® Asia Pacific 2014; Japan Regains Status As A Magnet For Investment And Development
Source: Urban Land Institute

Real estate fundamentals are expected to remain strong in markets throughout Asia in 2014, with stiff competition for conventional assets in prime markets boosting the popularity of niche property sectors and secondary markets for investments, according to Emerging Trends in Real Estate® Asia Pacific 2014, a real estate forecast jointly published by the Urban Land Institute (ULI) and PwC.

The report notes that, unlike other asset classes, real estate in Asia “barely flinched” this year in response to the tapering of the U.S. economic stimulus and expectations of higher interest rates. This is due, in part, because of the increase in sovereign wealth and institutional capital being directed to Asian markets, as well as the substantial volume of Asian capital being exported from China, Singapore and South Korea into real estate assets across the region.

Emerging Trends in Real Estate® 2014

November 19, 2013 Comments off

Emerging Trends in Real Estate® 2014 (PDF)
Source: Urban Land Institute and PricewaterhouseCoopers
From press release:

The U.S. real estate recovery is set to continue into 2014, with investors increasingly looking beyond some of the traditionally popular markets to secondary markets in search of higher yields, according to Emerging Trends in Real Estate® 2014, co-published by PwC US and the Urban Land Institute (ULI).

According to real estate market participants, the predicted growth in secondary markets is driven by investors searching for returns as opportunities in core markets become harder to find and the best assets become more expensive. As a result, the report anticipates that 2014 may be the year that many investors who have traditionally focused mainly on large established markets such as Boston, Chicago, Los Angeles, New York City, San Francisco and Washington, will be expanding their focus to other cities in order to protect capital. This trend, first noted in last year’s Emerging Trends report, is likely to build substantial momentum next year, given the steady pace of improvement in market fundamentals in secondary markets, and with more investments in those markets meeting investors’ risk/return metrics.

The movement into secondary markets is underpinned by the anticipated increase in both debt and equity capital during 2014. Respondents were particularly positive about the prospects for equity capital from foreign investors, institutional investors and private equity funds, as well as debt from insurance companies, mezzanine lenders, and issuers of commercial mortgage-backed securities.

After Sandy: A New ULI Report Looks at Mitigating Climate Change Through Land Use, Offers Recommendations on Strengthening Community Resiliency

October 9, 2013 Comments off

After Sandy: A New ULI Report Looks at Mitigating Climate Change Through Land Use, Offers Recommendations on Strengthening Community Resiliency
Source: Urban Land Institute

The reality of climate change will forever change community building, with planning and development decisions increasingly based on strengthening community resilience through what is built, and where and how it is built, according to a new report released today by the Urban Land Institute (ULI).

Leading up to the one-year anniversary of Hurricane Sandy, ULI has prepared After Sandy: Advancing Strategies for Long-Term Resilience and Adaptability, which offers guidance on community building in a way that responds to inevitable climate change and sea level rise, and helps preserve the environment, boost economic prosperity, and foster a high quality of life.

ULI, a global research and education institute dedicated to responsible land use, has a long history of advising communities on repositioning after disasters. At the request of three ULI District Councils—ULI New York (city), ULI Northern New Jersey, and ULI Philadelphia, which serve ULI members in those market areas—ULI in July 2013 convened a panel of the nation’s foremost authorities on real estate and urban planning to evaluate local and federal plans for strengthening community resiliency post- Sandy, and offer guidance on rebuilding efforts. Candid insights and observations from these experts formed the basis for After Sandy, a comprehensive, practical set of 23 recommendations focused on four areas—land use and development; infrastructure, technology and capacity; finance, investment and insurance; and leadership and governance.

The report’s overriding message: The increased frequency of severe weather events, as well as rising sea levels, are compelling the real estate industry to address climate change by working with the public sector to implement adaptive measures that better protect both the built and natural environment.

Tech-Savvy Gen Yers Still Flock to Stores, Challenging Retailers to Keep Up with the Quickly Changing Preferences of these Young Consumers, Says New ULI Report

May 22, 2013 Comments off

Tech-Savvy Gen Yers Still Flock to Stores, Challenging Retailers to Keep Up with the Quickly Changing Preferences of these Young Consumers, Says New ULI Report

Source: Urban Land Institute

Despite being far more tech-savvy than previous generations, Generation Y, the 80-million strong cohort of Americans between the ages of 18 and 35, has not forsaken shopping in stores for online purchasing – as long as retailers keep their offerings “fresh” and interesting, says a new report from the Urban Land Institute (ULI).

Generation Y: Shopping and Entertainment in the Digital Age, authored by ULI Trustee M. Leanne Lachman, president of real estate consulting firm Lachman Associates LLC; and Deborah L. Brett, founder of Deborah L. Brett & Associates, was released during ULI’s Spring Meeting this week in San Diego. It is based on an online survey of 1,251 Gen Yers conducted by ULI and Lachman Associates, a focus group conducted at Columbia University’s Graduate School of Business, and a literature search.

The report explores the shopping preferences of Gen Yers, who associate shopping with socializing, and who place a high value on living close to retail (another ULI report released this week found that 62 percent of Gen Yers prefer developments offering a mix of shopping, dining and office space). It notes that while Gen Yers enjoy shopping and dining out, they tend to bore easily, compelling retailers to constantly update their merchandise and find new ways to engage these consumers.

The study found that 37 percent of Gen Yers love shopping and 48 percent enjoy it. Half of the men surveyed and 70 percent of the women consider shopping a form of entertainment and something to share with friends and family. The appeal of shopping is particularly strong among Gen Yers who are Hispanic and African American.

Gen Yers tend to spread their dollars around generously, the study found, with more than half visiting a variety of retail centers at least once a month, including discount department stores (the retail type most frequently visited by Gen Y), community shopping centers, enclosed malls, department stores, big-box power centers, chain apparel stores, and neighborhood business districts. At the same time, 91 percent of respondents said that they had made online purchases over the previous six months, with 45 percent spending more than an hour a day looking at retail-oriented websites.

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