At the Urban Land Institute’s 11th Annual Emerging Trends in Real Estate Conference, presenters discussed recent trends in the real estate industry, impactful local projects and careers in real estate.
Trends in Real Estate
Andrew Warren, Director of Real Estate Research at PwC, highlighted the following interesting trends in the real estate industry right now:
Industry insiders still feel good about the state of the industry, despite the Congressional Budget Office’s prediction of a decline in growth and softening housing starts. However, as stated in the PwC report, “caution is advisable” because the “emerging trend for real estate demand in the decade ahead is not just for softer demand, it is for dramatically softer demand.” Many industry insiders agree that, while capital is readily available right now, there are fewer and fewer good deals to put that capital toward.
Local perspectives on the New Orleans market rated demand and opportunity as “average,” and New Orleans did not make the top of the list of top markets. Cities that show promise for development include Jacksonville and Salt Lake City.
Suburbs are gaining in popularity again as millennials age and start families, leading to a demand for more space for less money. This is causing a revitalization of some suburban areas, particularly those close to 24-hour cities like San Francisco and New York City, a concept newly coined “Hipsturbia.” The “collaborative consumption” model popular with millennials (think Uber, WeWork and AirBnB) also continues to expand into new industries.
Demand for affordable housing continues to grow, as a lot of previous development has been in the luxury sector. This may provide new opportunities for development, for example in the co-living space, but it may also result in housing policies, such as rent control, that may be challenging for landlords and developers.
Commitment to ESG (environmental, social and governance) principles continues to grow as younger investors and institutional investors increasingly consider this in determining where to invest. Technology is also having increasing impacts on the industry as tenants and investors expect conveniences provided by technology.
Local Real Estate Projects
Peter Aamodt of MCC Group, Emily Bullock of Spackman Mossop Michaels and Ryan Hodgins of New Orleans Redevelopment Fund discussed their recent local projects.
Aamodt described the NSA East Bank development, a 1.5 million square-foot, three-building project in the Bywater area. The development will use historic tax credits and provide affordable housing in 40% of the units along with ground floor retail and parking.
Bullock reviewed the Baton Rouge Downtown Greenway project, which incorporated green infrastructure and water management, as required for federal funding, and managed the difficult challenge of addressing proximity to the interstate.
Hodgins described NORF’s project at 1315 Gravier in New Orleans, which will include retail below and student and/or workforce housing above to accommodate demand from Tulane and LSU medical developments nearby. The project is taking advantage of the opportunity zone and historic tax credit programs as well as a tax abatement.
The unifying theme of these different projects seemed to be the benefits and challenges of working with public funds and programs.
Careers in Real Estate
A panel of speakers also discussed careers in real estate, offering the following highlights:
Although education is important, practical experience is essential in the real estate industry. Several of the panelists obtained degrees in unrelated or tangentially related fields, began working in the industry and then went back to school for more specialized training.
The development field also requires flexibility and jack-of-all-trades-type skills because these types of companies typically operate on limited budgets.
Tulane is now offering an undergraduate Sustainable Real Estate Development program within its school of architecture in addition to its popular Master of Sustainable Real Estate Development graduate program.