Emerging Trends in Real Estate: 2016 Edition US & Canada

[Antonio Gonzales]

Notice to Readers:

"Emerging Trends in Real Estate® is a trends and forecast publication now in its 37th edition, and is one of the most highly regarded and widely read forecast reports in the real estate industry. Emerging Trends in Real Estate® 2016, undertaken jointly by PwC and the Urban Land Institute, provides an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the United States and Canada."

For the complete report, please visit Emerging Trends in Real Estate 2016

Here are the Contents with topics covered in the report:

Contents

2 Chapter 1 Coordinating Offense and Defense in 2016

5 18-Hour Cities 2.0

6 Next Stop: the Suburbs . . . What Is a Suburb?

9 Offices: Barometer of Change

10 A Housing Option for Everyone

12 Parking for Change

13 Climate Change and Real Estate

15 Infrastructure: Network It! Brand It!

16 Food Is Getting Bigger and Closer

16 Consolidation Breeds Specialization

17 We Raised the Capital; Now, What Do We Do with It?

18 Return of the Human Touch

19 Issues to Watch

20 Expected Best Bets for 2016

22 Chapter 2 Capital Markets

23 The Debt Sector

28 The Equity Sector

35 Summing It Up

36 Chapter 3 Markets to Watch

36 2016 Market Rankings

38 Market Trends

39 The Top 20 Markets

49 Perspectives on Regions

60 Chapter 4 Property Type Outlook

61 Industrial

64 Apartments

67 Office

70 Hotels

71 Retail

75 Housing

77 Chapter 5 Emerging Trends in Canada: Changing Opportunities

78 Emerging Trends in Canadian Real Estate

85 Markets to Watch in 2016

90 Property Type Outlook

94 Expected Best Bets for 2016

95 Interviewees

Here are some highlights and excerpts from the report that I found informative:

"Every major college and NFL football team sees its game plan shaped by its offensive and defensive coordinators, working in concert with the head coach. The coordinators are expected to have both technical and strategic skills, the ability to work under pressure, and the capacity to adjust to rapidly changing conditions. For the offense, the coordinator is charged with marshalling the team’s resources to maximize opportunities and to translate them into points on the road to victory. For the defense, the coordinator is constantly assessing risks, both before and during the game, and countering them. In limiting the competition’s advantages, the defensive coordinator seeks to put his team in the best position on the field by managing adversity and, as much as possible, turning an opponent’s risk taking into an opportunity for his own squad."

"For real estate, 2016 will see investors, developers, lenders, users, and service firms relying upon intense and sophisticated coordination of both their offensive and defensive game plans. In an ever more competitive environment, with well-capitalized players crowding the field, disciplined attention to strategy and to execution is critical to success."

18-Hour Cities 2.0

"Last year, Emerging Trends identified the rise of the 18-hour city. This year, the real estate industry is expressing growing confidence in the potential investment returns in these markets. We are finding a tangible desire to place a rising share of investment capital in attractive markets outside the 24-hour gateway cities."

"Global as well as domestic investors are casting wider nets as they look at U.S. real estate markets. One such investor, at a large international institution, marveled at the number of secondary markets that are suddenly “hip.” Austin, Denver, San Diego, and San Antonio are examples, and rightly so. They rank in the top ten markets for entrepreneurship in the 2015 Kauffman Foundation study, and all four are in Emerging Trends 2016’s list of top 20 markets for real estate investment and development."

2016 Market Rankings

"In this year of movement, the Emerging Trends in Real Estate markets-to-watch survey reveals a new number-one market as Dallas/Fort Worth climbed four spots from last year’s survey to take the top spot, leapfrogging state rival Austin in the process, which remains in the number-two spot. Nashville, Atlanta, and Portland, Oregon, are new entrants into the top ten for 2016, while Minneapolis and San Antonio enter the top 20. Economic growth potential seems to be the reason behind the movement of markets within and into the top 20 for 2016. The market may be poised to take a more offensive approach in 2016 as the economy strengthens and real estate fundamentals improve."

San Diego Comes in at Number 16:

"In this year’s survey, San Diego moved up from number 20 in lastyear’s survey. A number of interviewees have started adding San Diego to their list of markets that they see as having the potential to outperform in 2016. The typical reason given is the concentration in life sciences and technology. These industries are seen as having significant tailwinds because of the aging of the U.S. population."

"Survey respondents feel the most optimism toward the residential real estate sector, with single-family and multifamily as the leading sectors for the market. The local market outlook for San Diego is one of the lowest for a top-20 market. Local respondents feel relatively good about the local economy, investor demand, and capital availability. The real weakness in the 2016 local outlook comes from public/private investment and the availability of development opportunities."

See how your market ranks in the full report!

Expected Best Bets for 2016:

Go to Key Secondary Markets: "Price resistance is an issue for gateway markets. Secondary markets, especially 18-hour cities, are emerging as great relative value propositions. Such markets are “hip, urban, walkable, and attractive to the millennials” while providing better future opportunities for rising net income and appreciation than the 24-hour city markets that led the post–financial crisis real estate recovery."

"These secondary markets (think Austin, Portland, Nashville, Charlotte, and similar cities) boast lower costs of living—particularly in housing—and strong growth potential. Value-add investors can access multiple sources of real estate financing from insurance companies, CMBS lenders, private equity firms, and cross-border investors. With this positive liquidity profile and socioeconomic fundamentals, asset selection in secondary markets should pay off as a 2016 strategy."

I was incredibly impressed with the thorough analysis and insightful perspectives of the interviewees as well as the thoughtful approach from those that compiled the data in an effort to present the findings and views in an easy-to-understand medium for the public.

It was refreshing to have a concise forecast report that provides an outlook on how real estate plays such an integral role in the economy of the United States and Canada.

Enjoy the read and Cheers to a successful New Year!