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On Nov. 2, 2021, ULI Charlotte hosted an in-person Trends in Real Estate lunch event at Carmel Country Club that was also live-streamed to a virtual audience. The event focused on trends in the local, regional, and national real estate market, challenges and successes that the industry is experiencing, and where it is heading in the next five years.
Leading the session was keynote speaker Andy Warren, Director of Real Estate Research for PricewaterhouseCoopers, who has co-authored ULI’s Emerging Trends in Real Estate® for the four years and provided an overview of the 2022 report.
Some highlights from the report include:
- The real estate industry feels better about the future compared to last year and justifiably so – we have a vaccine now and have adapted to pandemic challenges.
- Although people are confident, there are some concerns, particularly with material and labor costs and availability.
- The economic impact of the pandemic varied across industries and demographics.
- Industries with a more favorable outlook include industrial/distribution, alternatives (life science, data centers), and housing, while hospitality, office, and retail have a less favorable outlook.
- Although retail has suffered tremendously due to the pandemic, sentiment around retail is favorable, and essential neighborhood shopping centers have found innovative ways to adjust, such as curbside pickup.
- National real estate transaction volume is returning to pre-pandemic levels; Charlotte experienced less of a decline and now exceeds pre-pandemic levels.
- Most employees prefer a hybrid model with an idea of three days per week in the office, which could reduce the demand for office space, though some employers may want more space to spread employees out.
- Flexibility and convenience drive the next decade, where you can work anywhere and live anywhere.
- Looking to 2022, the top three themes of the real estate market are Housing Crisis Redux (affordability/supply challenges), Retrofitting Cityscapes (suburbanization of the urban core/infrastructure) and Climate Change Is on Us (moving from talk to action).
Following Warren’s presentation, Executive Director of University City Partners Darlene Heater led panelists in a discussion about how the research provided in the Emerging Trends in Real Estate® report is affecting the Charlotte market.
Panelists included:
- Bobby Speir, Senior Vice President of Mixed-Use Investment at Crosland Southeast
- Collin Lane, Senior Vice President at Atrium Health
- Liz Babson, Director of Charlotte Department of Transportation
Here are some key takeaways from the panelists:
- Home affordability is a concern for employers who want to attract top talent.
- While many Charlotte businesses are still transitioning back to the office, developers are focusing on more amenity spaces, including green space and outdoor terraces for offices and restaurants.
- Mixed-use development allows for more interaction and improves engagement for all uses and reduces the need for multiple car trips. It’s considered an amenity for office workers who can walk to shops and restaurants and even live close by.
- Community feedback is essential for bringing new developments to existing neighborhoods and helps shape project design.
- Businesses are rethinking office space and how to leverage technology to be more efficient by consolidating and optimizing space.
- Providing access to transportation creates access to jobs.
- CDOT is working with the private sector to create partnerships and make a significant investment in pedestrian, bike, and transit connections. The process is incremental and can feel disjointed until the pieces are put together.
- CATS is looking at adjusting from a hub and spoke system to provide more crosstown routes in order to reduce commute time.
- The new Wake Forest School of Medicine Charlotte campus will create a pipeline of new health sciences talent coming into the Charlotte market.
- Charlotte’s Unified Development Ordinance will shape the future of the city’s growth and development, and the proposed federal infrastructure bill could provide significant investment here.
- The cost of construction and land is a major barrier for affordable housing close to the CBD, but light rail and mass transit can be an equalizer, allowing for an easier commute from outlying areas with lower housing costs.
Overall, Charlotte continues to be one of the fastest-growing cities in the country, though the increase in construction costs and labor could slow that growth if we don’t find ways to mitigate it. We need to be thoughtful about infrastructure and planning to ensure that Charlotte remains a desirable city for businesses and residents for years to come.
Thank you to all of the speakers who participated in this event. Summary notes were provided by Angela Vogel Daley, Director of Strategy for Yellow Duck Marketing.
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