Partner Robert Steeg and Associate Margaret Glass attended the Urban Land Institute’s 10th Annual Emerging Trends in Real Estate conference, presented by IberiaBank, in January. Andy Warren of PricewaterhouseCoopers presented the 2019 Emerging Trends in Real Estate report regarding real estate investment and development trends. The report is based on a collection of surveys regarding investors, fund managers, developers, property companies, lenders, brokers, advisors and consultants’ opinions about various national and local real estate issues. Following are some of the interesting observations included in the report.
Real Estate Issues to Watch in 2019
- Rising insurance costs and the need for resilient development due to the increasing number and severity of natural disasters
- Cybersecurity risk management
- Aging public infrastructure’s impacts on the cost of doing business
- Immigration restrictions’ impact on market demand
- Numerous risk factors that suggest developing a defensive strategy is key
Expected Best Bets in Real Estate for 2019
- Industrial development (for example, fulfillment centers and warehouses for e-commerce)
- Garden apartments
- Quick-flip value-add deals in second-tier markets
- Alternative uses for former retail sites
Top Real Estate Markets for 2019
- Dallas/Fort Worth
- Brooklyn
- Raleigh/Durham
- Orlando
- Nashville
- Austin
Other Real Estate Trends for 2019
- 18-hour cities (a term coined by ULI to reference second tier cities) are expected to be an area of growth and opportunity
- Real estate business prospects for 2019 were rated 3.7 out of 5 by commercial real estate developers on a scale of 1 (Abysmal) to 5 (Excellent)
- The local outlook for New Orleans specifically was reported as 3 out of 5 (Average) based on the average score of local market participants’ opinions on a number of factors, including strength of local economy, investor demand, development opportunities, etc.
Real Estate Developers Panel
The conference also included a panel presentation by people involved in real estate development in New Orleans. Wisznia Architecture and Development presented two developments located in the Warehouse District, Two Saints and The Garage. Two Saints is New Orleans’ first co-living affordable housing apartment complex. The Garage is a luxury condominium created from a 1950s multi-story Buick Dealership. Edwards Communities discussed its new apartment building currently under construction in Mid-City next to the Lafitte Greenway. Nyree Ramsey, Director of the Cultural Innovative District (CID), discussed the community input process related to the planning of the CID along the Claiborne Corridor.
“Plan, Build Demand, Start Small, Develop”
Keynote speakers Joe Nickol and Kevin Wright of Yard & Company presented innovative ideas for faster, cheaper and more creative development. Their “Plan, Build Demand, Start Small, Develop” method bypasses many of the obstacles of traditional development. For example, early in the process, they obtain community input on the project by meeting residents where they are, in coffee shops or in public spaces, as opposed to requiring them to travel to a meeting place determined by the developer. Then they create demand and test ideas using inexpensive, movable and often impermanent facilities and amenities, such as pop-up beer gardens or markets. Finally, they use the information and feedback obtained during the testing phase to build smaller permanent facilities, which often lead to larger permanent facilities and changes in entire neighborhoods.
Examples of Yard & Company’s work>>
Yard & Company’s Neighborhood Playbook>>