Top Commercial Real Estate Trends to Watch in 2019

Slow and steady growth coupled by cautious optimism seemed to be the overall sentiment shared by real estate economists and industry experts at the 2018 ULI Fall Meeting in Boston, where panelists revealed their forecast for the U.S. economy and real estate market heading into 2019, as well as the annual ULI-PwC Emerging Trends in Real Estate Report, which discusses major trends to watch over the next several years. The overall outlook for the U.S. economy was positive, according to a forecast of 45 economists and analysts surveyed by ULI in September 2018, with expectations for continued, moderate growth despite a sea change in macroeconomic policy, including rising interest rates, tax reform, and more restrictive immigration. Fundamentals are expected to remain strong through 2020, with a slight moderation in some areas. Highlights include: • GDP growth: The survey forecasts GDP growth to end this year at 3.0%, before it slows to 2.5% in 2019 and 1.7% range in 2020. • Unemployment rate: The current record-low rate of 3.8% is expected to bump up slightly to 4.0% by 2020. • Transaction Read the full article…

ULI Special Report: For Renters, Walkability is Becoming More Valuable Than Public Transit

Technology is proving to be a major disruptor across sectors and real estate is no exception. Ride hailing and driverless vehicles were two top-of-mind disruptors at the 2018 ULI Fall Meeting in Boston, with industry panelists noting that these technological developments are fundamentally changing the way we build and manage our assets, and changing renter preferences from valuing public transit to putting a premium on walkability.

Renter Data Reflects Broader National Decline in Public Transportation Use

While public transportation usage is highest among apartment renters, recent data show a secular decline, keeping with the overall trend of changing commuter preferences and workplace environments. Driving to Work Lower Among Apartment Renters Reflecting the recent spike in car ownership rates and lower gas prices, driving to work has experienced a resurgence. Conversely, public transportation usage has witnessed alarming declines across major US cities, largely attributed to lower system upgrades. As shown below, commuting by private vehicles (primarily cars) was the dominant mode of transportation for working renters across all asset types. Between asset types, however, private vehicle rates varied from a high of an 87% share in suburban single-family rentals to a 64% share in downtown-oriented large apartment properties in 20161. Car ridership shares in small apartment properties, which are more dispersed along the downtown-suburban continuum, landed in an expected middle ground at 77%. Looking at the broader transportation landscape, as shown below, commuting rates by public transportation (including taxis, less than 1%) varied significantly from a share of only 4% in single-family rentals, to 12% in small Read the full article…

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