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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.

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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.

A New ULI Publication, Shifting Suburbs, Examines Creative Use And Adaptation Of Infrastructure To Support Compa ct Development In America’s Suburbs

February 5, 2013 Comments off

A New ULI Publication, Shifting Suburbs, Examines Creative Use And Adaptation Of Infrastructure To Support Compact Development In America’s Suburbs

Source: Urban Land Institute

Successful strategies for creatively using and adapting infrastructure to support more dense development in America’s suburbs are highlighted in Shifting Suburbs: Reinventing Infrastructure for Compact Development, a new report from the Urban Land Institute (ULI).

The report focuses on the growing trend for suburbs to be redesigned and redeveloped to be more people-oriented than car-dependent, offering more options for walking, cycling or using public transit to get from one place to another. With the U.S. population anticipated to grow by 95 million people over the next 30 years, and with the vast majority of this growth expected to occur in the suburbs of metropolitan areas, the challenge of providing the appropriate infrastructure to encourage compact growth has never been more important, notes Shifting Suburbs. Specifically, suburban arterials and first ring suburbs would benefit from the development of new approaches to solving infrastructure and land use challenges, it says.

The steady movement toward more compact suburban growth is being driven in part by Generation Y, a key demographic group (numbering 80 million) entering the housing and jobs market. These young professionals tend to favor the convenience and choices provided by urban-style environments, but often live outside of city centers for employment or financial reasons. Fitting their lifestyle preferences into a suburban setting has, in many markets, triggered a movement to rethink traditional infrastructure design, the report says.


Shifting Suburbs examines in extensive detail eight suburban infrastructure projects: Bridge Street Corridor in Dublin, Ohio; Aurora Corridor in Shoreline, Wash.; Belmar in Lakewood, Colo.; State Route 7 in Broward and Miami-Dade Counties, Fla.; White Flint/Rockville Pike in Montgomery County, Md.; Richardson, Texas; CityCentre in Houston, Tex.; and West End in St. Louis Park, Minn. The report evaluates the significant challenges faced by these places in trying to establish themselves as more compact suburban locations, including overcoming community resistance, obtaining the necessary funding, negotiating cross-jurisdictional planning issues, and establishing the required skill sets among the public and private organizations delivering redevelopment projects.

Emerging Trends in Real Estate(R) Americas

October 24, 2012 Comments off

Emerging Trends in Real Estate® Americas

Source: Urban Land Institute

The enduring low-gear real estate recovery should advance further in 2013: Emerging Trends surveys suggest that modest gains in leasing, rents, and pricing will extend across U.S. markets from coast to coast and improve prospects for all property sectors, including housing, which finally begins to recover. Most developers and investors who seek quick wins will remain frustrated as return expectations continue to ratchet down to more realistic but relatively attractive levels providing income plus some appreciation. In fact, real estate assets will almost certainly continue to outperform fixed-income investments in the ultra low-interest-rate environment induced by the Federal Reserve, as well as offer a familiar refuge from ever-seesawing stock markets.

Most areas can sustain little if any new commercial construction, given relatively lackluster tenant demand and the generally weak employment outlook. Only the multifamily housing sector continues to offer solid development opportunities, although interviewees grow more concerned about potential overbuilding in markets with low barriers to entry—probably occurring by 2014 or 2015.

Infrastructure 2012 Highlights Innovative Solutions At State, Regional, Local Level; Points To Impact Of Recession On Infrastructure Funding Worldwide

May 9, 2012 Comments off

Infrastructure 2012 Highlights Innovative Solutions At State, Regional, Local Level; Points To Impact Of Recession On Infrastructure Funding Worldwide

Source: Urban Land Institute
Global Report from Urban Land Institute, Ernst & Young Finds:

  • Fallout from the global recession is reflected in a decline in government infrastructure funding for major projects in Europe and Asia, as well as the U.S.
  • More large-scale public works involve public/private ventures as user fees and tolls become part of ultimate funding solutions worldwide
  • In the U.S., states and local governments are increasingly adopting “on-their-own” infrastructure funding strategies, looking to fund infrastructure investments with increased sales or gas taxes, bond issues, and user fees, including tolls.
  • Innovative local governments are combining new technology and pricing to better manage existing infrastructure and achieve other objectives. Many are looking to solutions that include linking infrastructure and land use and conservation.

+ Full Report (PDF)

ULI Real Estate Consensus Forecast

March 29, 2012 Comments off

ULI Real Estate Consensus Forecast (PDF)
Source: Urban Land Institute

  • Three-year forecast for 26 economic and real estate indicators
  • Responses from 38 leading real estate economists/analysts
  • Respondents represent major real estate investment, advisory, and
  • research firms and organizations
  • Survey undertaken from February 23 to March 12, 2012
  • A semiannual survey; next release planned for September 2012
  • Forecasts for:
  • GDP, employment, inflation, and interest rate indicators
  • Property transaction volumes, CMBS issuance, and cap rates
  • Property investment returns for four property types
  • Vacancy rates and rents for five property types
  • Housing starts and price

The New California Dream: How Demographic and Economic Trends May Shape the Housing Market: A Land Use Scenario for 2020 and 2035The New California Dream: How Demographic and Economic Trends May Shape the Housing Market: A Land Use Scenario for 2020 and 2035

January 8, 2012 Comments off
Source:  Urban Land Institute
In 2008, California passed Senate Bill (SB) 375, an effort to reduce greenhouse gas emissions (GHGs) by redesigning the state’s urban growth patterns. The legislation specifically directs the state’s metropolitan planning organizations (MPOs) to devise strategies to reduce vehicle miles traveled—and hence GHGs—by better matching future housing development with public transit opportunities. As part of the process, the MPOs are required to devise targets for GHG reduction as well as to develop “sustainable communities strategies” that better coordinate land use and transportation decisions.
For a state more used to sprawling apart than growing together, it seems a tall order: how do we reverse years of a pattern in which more land is consumed, average commutes lengthen, and environmental damage rises? In this compelling new report, one of our country’s leading land use planners, Arthur C. Nelson, offers an important bit of news for those who worry that ambitious targets are unrealistic: the demographics are on our side.
While most of the national focus on our demographic future is on the rising diversity of our population—a fact well known here in California—Nelson points to two equally important changes: the aging of the population and the reduction in the share of households with children. Both mean that as California’s population grows over the next 40 years, it will see a rise in housing demand for smaller lots, multifamily units, and other land use configurations consistent with transit-oriented compact development.
The challenge is how we get there from here. Nelson tries to connect the dots by illustrating the shift in the composition of real estate demand and pointing to the opportunity of “recycling” nonresidential land, particularly those lands adjacent to transit systems. Although the specific projections that Nelson offers may be subject to debate, the overall vision is certainly not. We can grow smarter and grow greener, meeting the mandates of SB 375 by planning for the future rather than the past. rather than the past.

Infrastructure 2011: A Strategic Priority

August 13, 2011 Comments off

Infrastructure 2011: A Strategic Priority (PDF)
Source: Urban Land Institute

Infrastructure 2011: A Strategic Priority assesses the state of infrastructure in the United States and around the world, examines what the next few years are likely to hold, and provides recommendations for moving forward on the infrastructure investments and strategies that are needed for regions and countries to continue to prosper and grow. Despite increased rhetoric about the importance of infrastructure, states and metropolitan areas are struggling to find funds to make basic repairs on aging systems and to build the new transit and road networks needed to position themselves for future growth.

Infrastructure 2011: A Strategic Priority

May 20, 2011 Comments off

Infrastructure 2011: A Strategic Priority
Source: Urban Land Institute

Infrastructure 2011: A Strategic Priority assesses the state of infrastructure in the United States and around the world, examines what the next few years are likely to hold, and provides recommendations for moving forward on the infrastructure investments and strategies that are needed for regions and countries to continue to prosper and grow. Despite increased rhetoric about the importance of infrastructure, states and metropolitan areas are struggling to find funds to make basic repairs on aging systems and to build the new transit and road networks needed to position themselves for future growth.

+ Full Report (PDF)

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