I have been attending Urban Land Institute Annual Meetings for over 30 years and they never disappoint. This year’s meeting in Chicago was no exception.
This assemblage of real estate professionals brings together participants from every walk of the industry. The program offers a bountiful agenda of speeches, lectures, panel discussions and tours, all set within a milieu of heavy networking and socializing.
Members of ULI are hands-on real estate practitioners. Each Annual Meeting offers a firsthand gauge of the health of real estate, and the mood of the this year’s registrants makes it clear that real estate is alive and “almost well” as evidenced by the relatively positive disposition of over 6000 attendees.
Since the economic collapse in 2008, real estate has been staging an incremental comeback. “We’re in the beginning of the middle innings,” was one description of real estate’s current state. ULI’s 2014 Emerging Trends in Real Estate report, a year by year survey of the industry that reflects the opinions of over 1,000 experts, affirms as much. The report, available at www.uli.bookstore.ipgbook.com/ is a must read for anyone in the business. The adage, “all real estate is local,” is more than evidenced by the way the Trends report slices and dices geographic and market sectors.
According to the report all property types are thriving. Topping the list of favored places for investment are industrial and distribution properties. This is a clear shift from the on-fire apartment market of the last few years. Apartments were even surpassed by hotels. Office and retail came in at 4th and 5th places. For development, the order varies only slightly, placing apartments 2nd, hotels 3rd, retail 4th and office 5th.
The report also ranks the most viable geographic markets. The hottest markets are where job growth recovery is greatest. The San Francisco Bay Area leads the list with San Francisco and San Jose separated only by Houston for the top spots. The tech based economy, life style, job growth and productivity are drawing capital and investment to the Bay Area and all property types are benefiting. Most intriguing is the descent of Washington DC, which fell from 8th place last year to 22nd.
Absence of Politics
Washington’s slippage was due in part to the uncertainty of government’s behavior.
Over the years, ULI members have never been shy about expressing their views on government and the policies that impact the industry. Just two years ago in describing the Annual Meeting, I reported that “the frustration with dysfunctional government was omnipresent.” Given recent events, I expected more political discourse. Even keynote speaker Jeb Bush began his talk explaining that his comments would be non-partisan. He focused on education and immigration. The one notable exception was real estate mogul Sam Zell. Never without strong opinions, Sam offered that there is a senior leadership problem in the country, that the Fed printing money is very dangerous and that for the first time in his life he is buying gold.
The Urban Land Institute’s mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. As such, its focus extends to every land use and property type. Over the years ULI has promulgated its mission with significant and important issues. Smart growth and sustainability are but two examples. This year’s initiative is Building Healthy Places. While addressed cursorily last year, it seems to have sprung to life fully grown with the introduction of two new publications, Ten Principles for Building Healthy Places, www.uli.org/report/ten-principles-for-building-healthy-places/ and Intersections: Health and the Built Environment, www.uli.org/report/intersections-health-and-the-built-environment/ . Multiple sessions were devoted to the topic, and the rallying cry to developers is, “We can help solve an onerous problem.” The statistics on the state of the nation’s health are frightening, and these two reports are important reading for anyone in the business.
Real Estate can make a difference. One of the most compelling examples of outside the box thinking about land use for healthy living is the program being spearheaded by Ron Finley in South Los Angeles. He presented his Guerilla Gardening program for bringing better food choices to the inner city. His talk is captured on this entertaining video. www.uli.org/videos/the-urban-gangster-gardener/
Other topics of focus:
• Changing demographics – Gen Y is having a profound effect on development patterns
• Emergence of the cities – by 2050, 70% of the world’s population will live in cities.
• Globalization – it’s becoming increasingly impossible to tell the difference between places based on the look, feel and especially in retail tenant mix.
• Capital availability – development is now proceeding based on merit rather than the ability to obtain capital.
• Sustainability – all things green are critical facets of today’s development.
True to its mission, ULI is extraordinarily generous in sharing information, and this link to the Fall Meeting programs offers some terrific knowledge and insight. www.uli.org/events/fall-meeting/
I always come away from the ULI’s Annual Meeting impressed with the intelligence and competency of the industry and its grasp of the challenges facing our planet. It’s a group that offers great hope for the future.