To kick off the afternoon portion of the day, ULI Philadelphia hosted a session called “Local and National Emerging Trends Presentations” led by Lauren Gilchrist, Senior Vice President & Director of Research – Philadelphia, JLL and Anita Kramer, Senior Vice President Capital Markets, the Urban Land Institute, and moderated by Sara Doelger, Principal of Argosy Real Estate Partners. This session focused on current and future trends in commercial real estate in the post-COVID world.

Kramer presented on the highlights from the 2021 Emerging Trends Report, a trends and forecast publication now in its 42^nd edition, jointly published by PwC and the Urban Land Institute, that 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. She started off with her presentation on lasting trends that would come out of the COVID-19 pandemic, focusing on a wide range of topics from racial and social equity to the shifting scene in retail real estate. The first focus was on reinventing cities in the post-COVID world. The major consensus here was that future infrastructure development/re-developments would put a high priority on open spaces and green spaces. While dated infrastructure from the 1950’s and 1960’s is already being re-imagined, in the post-COVID world, this transition will proceed at a much more rapid pace. Kramer also talked about how changes already occurring pre-COVID are being forced to occur at a faster pace than otherwise would have been. E-commerce has taken a big leap forward during this pandemic, so in order for brick-and-mortar stores to stay relevant, an emphasis on smarter use of space is going to be paramount for physical storefronts to stay afloat. While this recovery period will be a painful one for the sector as a whole, most of the ill effects will be experienced by smaller mom and pop shops across major metro areas.

After the talk on retail, Kramer focused on how the pandemic has really hit the monetary revenues of major cities across the U.S. Lower tax collection due to unemployment has put a major strain on many cities ‘financials, some of which are in a much worse position than they were during the Great Depression. The presentation concluded with discussion on the strong movement in racial and social equity, specifically on the growing concern in the industry that there are still racial and social inequality issues that need to be fixed.

Gilchrist presented on her firm’s economic and real estate outlook for 2020 and beyond. Her presentation was centered around how the office sector was impacted through COVID and what this sector would look like moving forward. One of the major points that she emphasized was that the office sector would not go “extinct”, but a more flexible approach to working remotely will be commonplace moving forward. Through various surveys and leasing activities from major Fortune 500 companies, all indicators lead to the office work environment picking back up again soon. The office environment will most likely not be the same as it was pre-COVID, but the sector will by no means be a thing of the past.

To wrap the session up, moderator Sara Doelger, asked the two presenters an interesting question brought into the virtual chat by one of the attendees; “What trends in the commercial real estate sector are temporary and what trends are here to stay?”. Both presenters said that the flexibility in terms of remote work will be a permanent change in many industries moving forward. Employees will be seeking to have that option of flexibility across the country. In terms of temporary changes, they pointed out that the strict enforcement of gatherings in crowded places will be lessened after the pandemic is under control. People may not congregate as much as they used to pre-COVID, but collaboration in the office space will definitely be back in some way shape or form.

ULI Philadelphia thanks its sponsors, speakers, and all of the members and volunteers who made this event possible.

See below for links to additional recaps from the Annual Real Estate Forecast 2021:

Contributed by Tobin Joseph, Assistant Cost Manager at Hanscomb Consulting and member of the ULI Philadelphia Young Leaders Group.