The Trend Report: Emerging 2016 Insights

The Urban Land Institue recently released their annual report on the emerging trends in Real Estate for the year! Here are just a few highlights from their findings on the trends we can expect to see emerge nationally over the course of 2016!

Second Tier Cities Take Center Stage

Second tier cites such as Austin are booming, and according to the report, these cities are only getting started. In addition to their reputations for hipness, cities such as Nashville, San Antonio, Portland, Austin and Raleigh-Durham are also attracting attention for their lower costs of living, and their increasing ease of staying connected far from main hubs, more upside from affordable and available investment opportunities, and increasing sophistication from realtors and investors.

Will Millennial Parents Move to the ‘Burbs?

A generation traditionally known for their obsession with urban living, a growing number of Millenials are becoming parents and looking to find homes and good schools for their children. While this generation has put off having kids longer than previous generations, recent studies suggest that a larger number will soon become parents, and could quickly fuel a suburban boom. However, these won’t be the suburbs of yesteryear. Studies show that young millennial parents will be drawn to more mixed-use, walkable developments, offering a mix of urban and suburban benefits with quick easy access to the city’s core.

Investment in the Changing Office Landscape

The continued recovery of the US economy has led not only to job growth, but also a strengthening of the commercial sector. Open office plans still dominate the market and the average SF per worker, which was 253 in 2000, is predicted to shrink to 138 by the year 2020. Showing no signs of slowing down, investors can expect to see continued development and redevelopment of existing spaces, as well as a continued rise in coworking.

Pulling Up Parking Lots?

As many young Americans opt out of car ownership, and tech trends such as ride-sharing and autonomous cars begin to change transportation patterns, many urban planners, government officials, and real estate owners are questioning if parking lots are the best use of downtown real estate. Trends suggest that “existing parking represents a suboptimal use of land,” and as cities change zoning regulations to reflect these shifts, developers are asking how they can take advantage. Are surface lots and parking structures potential development opportunities?

Increasing Investment in Infrastructure

America’s crumbling infrastructure has been in the news for years, yet the need for new mass transit, better roads and highways, and improved aviation and rail facilities hasn’t been met: the American Society for Civil Engineers estimates that $3.6 trillion would be needed by 2020 to meet the backlog of much-needed repairs. This suggests there’s a great upside in new models for infrastructure funding, including public-private partnerships and real estate investment trusts (REITs).

Urban Agriculture Is On The Rise

While conceding that we’re not likely to see silos dot the skyline anytime soon, the ULI report suggests that an increasing number of viable urban farms and rooftop gardens, including Brooklyn Grange in New York, large urban farm operations in Detroit, and a forthcoming vertical farm in Newark, New Jersey.

CLICK HERE to read the full report and discover the rest of the exciting emerging trends for this year!

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Make sure you’re staying on top of the latest trends, newest developments and hottest new stores in Huntsville by subscribing to our weekly blog updates!

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KADIE PANGBURN
MARKETING COORDINATOR
CRUNKLETON & ASSOCIATES
KADIE@CRUNKLETONASSOCIATES.COM
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How Changing Demographics Are Shaping The Future – Part Two: Millennials

In PART ONE of this post we took a look at how the baby boomer generation is primed to impact the future of the economy in a big way, affect market trends and influence the commercial real estate industry in the coming years.

Today, in part two, we’ll be taking a look at their equally economically powerful counterparts, millennials.

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To briefly recap, the baby boomer and millennial generations comprise a combined 61% of the total population.  This means that their likes, dislikes and even mere preferences hold a lot of sway on the future of the market and in turn the future of the commercial real estate industry.

By shifting the focus away from property types and onto the types of generations who live, work and shop in those properties, we can gain new insights and examine possible trends for the coming years.

Now that you’re all caught up, let’s examine how millennials are already shaping the future of the marketplace.

Born between 1980-2000 and totaling about 80 million Americans, millennials spend approximately $600 billion annually already.  By 2020 when the majority of them will have entered the workforce, they are expected to be responsible for a much as $1.4 trillion in spending per year, representing 30% of total retail sales.

With that in mind, let’s examine a few of the millennial trends that are set to have the largest impact on the commercial real estate industry in the coming years.

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First, millennials are going to have a big impact on the future landscape of office spaces.  This is due in large to this generation’s preference to view the office no longer as a place dedicated to individuals tasks, but as “a meeting place for a diverse group of people to gather, share and collaborate,” stated a report by Jones Lang LaSalle.  The report when on to explain that, “offices are becoming places where people with common goals, but diverse sets of skills meet to generate new ideas.”

However, not only is the interior landscape of our office spaces and the dynamics of how we function within the walls of those spaces set to shift, millennials are also having an impact on the very location of those offices as well.

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More than anything millennials crave community and collaboration, and this translates into a deep love of mixed-used, walkable, live, work, play environments.  And while many millennials are being drawn to urban downtown areas for this very reason, research has shown that the suburbs are not dead. However, if they wish to adapt to this shift in demand will have to prioritize creating mixed-use, walkable neighborhoods that are transit accessible.

One interesting impact that the, tech savvy, online shopping, millennial generation will have on the commercial real estate industry in the coming years is in the industrial sector.

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With the rising demand for online shopping and faster delivery times, comes an increased demand for industrial distribution and fulfillment centers.  “An estimated 30 percent of the U.S. industrial big-box demand has a correlation to e-commerce, and this will not abate anytime soon. Major retailers continue to open new fulfillment centers that offer access to the nation’s key population centers and infrastructure, and are opening smaller centers to enhance coverage in secondary markets.” stated La Salle.  “Currently, around 59% of the country’s population shops online; millennials, a generation raised on technology, comprise the majority.”

Lastly millennials place a large priority on price, having lived almost half their life during the great recession, “they habitually use mobile devices to compare prices while shopping in stores and tend to favor value-oriented retailers like dollar stores, second-hand stores, drug stores and off-price retailers,” commented La Salle.  Shop’s topping the millennials most visited list include: Forever21, Old Navy, Marshalls, Target, Walmart, Macy’s, Kohl’s, TJ Maxx, Urban Outfitters and JCPenny.

Millennials are a tech-savvy, ambitious generation who want to be “in the know,” love to participate and engage, crave authenticity, are tremendously influenced by their friends and want to make a difference with their lives.  But it’s also important to keep in mind that these millennials are just now coming into their own, entering the workforce and about to start families.  Keeping tabs on this demographic over the next several years will give many investors a leg up to be prepared for the shifting demands of the future marketplace.

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Make sure you’re staying on top of the latest trends, newest developments and hottest new stores in Huntsville by subscribing to our weekly blog updates!

404220_10150473102152791_1516819070_nKadie_Sig
KADIE PANGBURN
MARKETING COORDINATOR
CRUNKLETON & ASSOCIATES
KADIE@CRUNKLETONASSOCIATES.COM

The Trend Report: Urbanization

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According to a recent report compiled by PwC and The Urban Land institute, urbanization will be the number one emerging trend for real estate in 2015.

The report stated that, “no longer is it accepted that only the great coastal cites can be alive around the clock and on weekends.” Instead, it went on to say, “downtown transformations have combined the key ingredients of housing, retail, dining, and walk-to-work offices to regenerate urban cores, spurring investment and development and raising the quality of life for a roster of cites.”

The driving force behind this trend?  Millennials.

Millennials, people born between the early eighties and late nineties, are being cited as the major drive behind the growing urbanization trend.  80 million-members strong, this group is entering the market for housing and jobs and they are opting for the convenience of urban-style live-work-play environments in an effort to reduce time and expense on commuting and transportation.

But what does this mean for Huntsville?

Huntsville, as a major innovation market, where millennials are becoming highly sought after by leading tech firms for their cutting-edge skills, is quickly responding to this growing trend by engineering the type of, live-work-play communities that will entice and retain these talented individuals.

Organizations such as Downtown Huntsville Inc. have formed to help foster the revitalization of the urban downtown Huntsville area by creating a vibrant thriving community of individuals deeply rooted in the history and heritage of their city and invested in it’s future.

The city itself has taken great strides as well in helping to structure an environment to encourage urban growth by offering incentives and rezoning districts to make them more attractive to investors.

And developers are taking notice.

“Increasing numbers of people are desiring to live downtown, due to the vibrant atmosphere, walkability, convenience, and quality of life,” commented developer Charlie Sealy III in an interview with Business Alabama. Sealy, the man behind Belk-Hudson Lofts, led the charge on the Urbanization trend in 2012 and is continuing it with his newest upcoming addition to downtown, The Avenue.

With 21,000 square feet of retail space and 193 residential units for rent, The Avenue will be a game-changing mixed-use development for downtown Huntsville. “I wanted to undertake another development downtown because I believe in the continued growth and popularity of downtown.” Sealy later went on to state, “I believe Huntsville will grow in population and economic activity in the near future, and the appeal for urban living, shopping, dining and gathering will increase, as it is in other leading cities.”

Crunkleton & Associates is excited to have been contracted to perform the leasing for all of the retail space for the upcoming development. “We have seen a dramatic increase in capital being invested into downtown with no real end in sight,” said Wesley Crunkleton, Qualifying Broker of Crunkleton & Associates.  “Most of this investment has been or will be in mixed-use projects that include a residential and retail component.  With this, we have continued to see an increase in retailers and restaurants wanting to be downtown. While urban living seems to be leading the charge I expect to see more hotel and office development to follow.”

With their eye on innovation, desire to capture the talent of incoming millennials, and their willingness to listen to an ever changing marketplace, Huntsville has positioned itself perfectly to take full advantage of an urbanization trend that has proven it’s not about to fade any time soon. SplitLine

404220_10150473102152791_1516819070_nKadie_Sig KADIE PANGBURN MARKETING COORDINATOR CRUNKLETON & ASSOCIATES KADIE@CRUNKLETONASSOCIATES.COM