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Increasing interest in suburbs make Sunbelt cities more attractive, need for office space shifts as more companies embrace work from home according to new PwC, Urban Land Institute report
WASHINGTON D.C. (OCTOBER 14, 2020) – The Urban Land Institute (ULI) and PwC US today released Emerging Trends in Real Estate® 2021, highlighting the evolving trends shaping the real estate industry. The report, which includes proprietary data and insights from more than 1,600 leading real estate industry experts, explores how Covid-19 accelerated many existing trends like retail footprint reductions, while it spawned new ones such as an increased focus on social justice and health and wellness, and stopped others in their tracks like the appeal of big cities.
The report highlights how Covid-19 heightened the desirability of lower density areas for both residential and commercial real estate, with interest concentrated in the Sunbelt markets. Cost-conscious companies will gravitate toward cities that are business-friendly and low cost with large, growing workforces. Raleigh/Durham, N.C., for example, is nicknamed the “Bay Area of the East Coast,” due to a surge in technology jobs and the area’s reputation as an education mecca. Homebuyers will look for suburban locations with low taxes, affordable housing, auto-oriented transportation, and good job prospects. While growth in the suburbs has been a consistent trend since this report first predicted it five years ago, greater family formation among millennials and flexible work from home policies are boosting this shift.
Social unrest and protests in cities across the country have also played a role in the reevaluation of presence in urban cores. 70% of respondents agree that the real estate industry can address and help end systemic racism – from promoting diversity, equity and inclusion within the sector, to looking for ways to develop underserved communities. On a rating scale of social issues in real estate, income and racial inequality moved from little to moderate importance last year, to moderate to great importance.
“Times of great change always present significant opportunities,” said W. Ed Walter, Global CEO of ULI. “In the near term, our suburbs will benefit from new growth spurred by shifting demographics and changes to living and working patterns resulting from the COVID crisis. Our cities will have the opportunity to respond by reimagining their public realm, building more resiliently, and reinventing assets, such as retail, that were already struggling before the pandemic. As an industry we have the opportunity to strengthen by truly embracing diversity and tackling the challenges faced by our communities.”
“Now, more than ever, the real estate industry has the chance to take the lead in using planning and development skills and investment capital to reshape our work and lifestyle environments. These tools can be used to address societal issues of safety, green space and racial equity,” says Byron Carlock, PwC Partner and U.S. Real Estate Practice Leader. “The gauntlet of responsibility is ours to embrace, and industry leaders see the opportunities and are responding with investment and leadership.”
Trends Highlighted in the Report Include:
The Top 10 Markets in Emerging Trends in Real Estate® 2021
First introduced in the 2015 report, eighteen-hour cities continue to dominate the Top 10 overall real estate prospects, powered by strong growth, homebuilding outlook, affordability, and job prospects.
Now in its 42nd year, Emerging Trends in Real Estate® is one of the most highly regarded annual industry outlooks for the real estate and land use industry. It includes interviews and survey responses from 1,687 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.
About the Urban Land Institute
The Urban Land Institute is a non-profit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the institute has more than 42,000 members worldwide representing all aspects of land use and development disciplines. For more information, please visit uli.org or follow us on Twitter, Facebook, LinkedIn, and Instagram.
About PwC US
At PwC, our purpose is to build trust in society and solve important problems. PwC is a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com/US.