Emerging Trends in Real Estate 2012 - Urban Land Institute

8
7
6
5
4
3
2
1
0
'94 '96
'98
'00
San Diego
'02
a major corporate presence, and limited
mass transit options mean businesses
cluster to avoid traffic congestion near
prime bedroom communities, mostly
north of downtown. Apartment investors
always do well, hotel outlooks continue
to improve, and housing prices revive
before those in most national markets.
San Diego’s formidable ace in the hole
remains near-perfect year-round weather,
which helps attract talent pools to local
biotech companies, as well as a steady
stream of upscale retirees. The large U.S.
Navy base doesn’t hurt either, undergirding
the local economy.
Denver (11). Downtown steadily remakes
itself as an enticing, highly desirable
21st-century city center. The acclaimed
8
7
6
5
4
3
2
1
'04
'06
'08
Denver
'10
'12
0
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12
6.17
6.16
LoDo (Lower Downtown) entertainment
district is being built out, surrounded
by sustainable office development and
boutique apartment projects: 4,000 units
begin to come off the drawing boards,
promising “significant changes ahead.”
First, new restaurants and a sports
stadium attracted nightlife; now developers
cater to echo boomer residents with
social amenities like landscaped roof
decks, gyms, and community rooms.
“We’re gradually becoming a 24-hour
city,” an interviewee says. Union Station
redevelops into a full-blown light-rail,
bus, and train transportation complex,
serving rising numbers of suburban
commuters who now have alternatives to
driving on congested highways. Transitoriented
development pops up along new
suburban station stops. “Denver feels
good. We have the draw of good-paying
clean-tech, energy industry jobs with a
reasonable cost of living and improving
transportation.” Although the office
market moves sideways, housing sidestepped
the boom/bust debacle. Better
days definitely seem to be ahead.
Dallas (12). Having “mostly dodged a
bullet,” Dallas benefits from the “Texas is
good for business/low taxes” storyline.
Companies continue to move data
processing, sales, and administrative
back-office operations to the Metroplex
to take advantage of “low-cost labor, the
great airport [D/FW], and central U.S.
location.” Recent discoveries of huge
natural gas fields also buttress prospects.
But investors always hesitate because of
Exhibit 3-8
U.S. Industrial/Distribution Buy/Hold/Sell Recommendations
by Metro Area
Los Angeles
Miami
San Francisco
Houston
Dallas/Fort Worth
San Diego
Washington, D.C.
New York City
Phoenix
Denver
Chicago
Boston
Philadelphia
Atlanta
0% 20% 40% 60% 80% 100%
Source: Emerging Trends in Real Estate 2012 survey.
Buy
Hold Sell
Seattle 66.99 28.16 4.85
63.93 27.87 8.20
61.18 32.94 5.88
59.32 33.90 6.78
51.55 36.08 12.37
44.76 38.10 17.14
43.30 46.39 10.31
42.02 45.38 12.61
39.79 53.76 6.45
38.68 35.85 25.47
37.50 45.83 16.67
37.14 45.71 17.14
29.91 51.40 18.69
29.11 59.49 11.39
28.33 54.17 17.50
36 Emerging Trends in Real Estate ® 2012