Real Estate Forecast Press:
Thank you to the Urban Land Magazine for covering the event. To read their article, Cautious Confidence Driving Optimism Across Sectors in Philadelphia, click here.
Thank you to State Broadcast News for covering the event. To read their article, Strong Economy Keeping All Asset Classes Riding High, ULI Outlook Audience Told, click here.
To read the ULI Philadelphia Press Release, click here.
To view more pictures on our Facebook page, click here.
Over 500 ULI members and real estate professionals came together on November 29th for the 19th annual ULI Philadelphia Real Estate Forecast to hear the perspectives of leading experts in the retail, hospitality, industrial, multi-family, and office sectors, as well as an overview of the Emerging Trends in Real Estate® 2019 Report released by ULI and PwC. This year’s program focused on a year of transformation.
Here were some of the key takeaways to consider as we wrap up the fourth quarter and ring in the new year:
Industrial trends– presented by Bill Hankowsky, Chairman, President & CEO of Liberty Property Trust:
E-commerce has had the largest impact on the industrial sector. Businesses need more space and storage for efficient distribution. Since the population has growing expectations of delivery times, not only has the need of warehouses increased but also their locations have come closer and closer to city limits. The ideal location now falls within the “last mile” or within the bounds of 80% of the urban population.
Retail trends – presented by Joe Coradino, Chairman & CEO of PREIT:
Joe Coradino coined the phrase “not your grandmother’s mall”, which sums up what is happening in suburban retail. While online shopping receives a lot of attention, it only makes up 10% of retail sales and is not the sole force behind mall vacancy. Modern day malls have, however, transformed to keep up with the consumer and now focus in large-part on experiences. Introductions of gyms, sports clubs, and fitness studios are now being integrated into the mall experience.
Hospitality trends – presented by Jay Shah, CEO of Hersha Hospitality Trust:
Hospitality is focused on the expectations of each generation of users. The challenge of design in hospitality has been balancing ever-changing modern needs with timeless elements. Something to watch- Business Transient Travel, it’s now a major player. Lifestyle Hotels have also come to the forefront as the next generation of boutique hotels offering personal, more innovative experiences that build brand loyalty.
Muliti-Family trends – presented by Doug Yearley, Chairman & CEO of Toll Brothers:
Urban lifestyle amenities have been prominent in multi-family development both in and outside of cities. Millennials and baby-boomers are looking for walkability, community and recreational activities. “Amenities gone wild” has been used to describe how multi-family assets are attempting to meet a range of resident needs. Everything from indoor pools and business centers to yoga studios, movie theaters and bars have become integral to the success of many multi-family projects. The suburbs, however, are still very appealing with millennial interest and patterns of later and larger home purchases.
Office – presented by Jerry Sweeney, President, CEO & Trustee of Brandywine Realty Trust:
Challenging the perceptions of where the office is going and how customers are using space differently is key in the office sector. While office cap rates are currently stable, rising costs of construction are slowing effective rental rates. There’s certainty in declining demand with the availability of alternatives such as co-working spaces. A focus on convergence between office, hospitality, and public spaces has become increasingly important. The office sector must broaden its appeal to the larger consumer and stay on top of emerging social trends. Talk about flex space…
Local trends were presented by Lauren Gilchrist, Senior Vice President of Research for JLL Philadelphia. Lauren compared the local market conditions to the Flyer’s mascot, Gritty – who is a little bit scary and chaotic but also full of potential. She presented thorough data by sector and neighborhood. Some key takeaways were that Philadelphia has the largest growth in the educated workforce in 2018, which is great news for the professional service industry and office markets. Since the general population has grown by 41% since 2005, communities have been deeply impacted, requiring serious public policy discussions. While 2018 was a record year for construction in Philadelphia, the construction cycle will slowly wind down. However, the first half of 2019 is expected to stay strong and robust.
National trends were presented by Mitch Roschelle, Partner and Business Development Leader for PricewaterhouseCoopers. He highlighted that interest rates, regulations, global financial crisis, securitization, urbanization, and technology are all major factors on the national level. Demographic shifts, smoother economic cycles and climate change are also playing a part. When trade assets are dry, property remains a good asset and people are generally optimistic about profitability. His key takeaway was to keep your eye on the disruptors. Technology is changing real estate. Environmental, Social, and Governance Practices are also much more relevant to investors and can offer meaningful advantages.
ULI Philadelphia thanks its sponsors, speakers, and all of the members and volunteers who made this event possible. We are proud to stand among industry leaders who are driving change in real estate and land use and we look forward to what’s in store in the upcoming year.