The Emerging Trends 2017 presentation and panel could not have come at a more tumultuous time–the morning after the 2016 Presidential Election. Yet a full crowd was on hand on the morning of November 9 at Hyatt at Olive 8 to hear about current real estate market sentiment throughout the country, as well as forecasts for the coming year.
The presentation kicked off with an announcement regarding the local launch of the Women’s Leadership Initiative. This effort has the goal of engaging rising female members through leadership training and mentorship. After this announcement, Pat Callahan of Urban Renaissance Group and Greg Johnson of Wright Runstad made an announcement regarding the upcoming ULI Spring Meeting here in Seattle. Sponsorship opportunities remain available and you are encouraged to contribute to what is certain to be a memorable meeting.
Mitch Roschelle of PwC then kicked off this year’s Emerging Trends presentation with a few words to describe the current real estate market: strong, robust, busy, balanced, overheated, uncertain, measured, and competitive were some of the words chosen by Emerging Trends respondents to describe our current situation. He touched on the ‘Kinder/gentler’ real estate cycle that we currently find ourselves in where supply and demand have tracked each other more closely than in previous cycles. He then discussed the topic of ‘Optionality’ that is factoring into many investment decisions whereby investors now view product types as more fluid than before. The topic of ‘Labor Markets’ was raised with the concern that construction costs may be set for continued growth due to a shrinking labor force and less labor force participation. The topic of ‘Affordability’ was mentioned, not in the sense of rising housing costs here in Seattle, but as a broader theme whereby prices of residential real estate seem to be consistently rising faster than incomes throughout the country. Finally, the key cities for real estate were discussed with several factors seeming to explain the success of places like Austin and Seattle: quality internet connectivity, a high millennial population, and a prevalence of microbreweries.
After concluding the presentation, panelists discussed themes such as sustainability and resilience in the real estate markets. Moderator Ash Awad of McKinstry discussed the impressive influence of LEED in the industry after what has been a limited existence overall. Panelist Molly McCabe of HaydenTanner spoke about the importance of sustainability to the bottom line and its emergence as more than just a luxury item in the marketplace. Panelist Sarah Neff of Kilroy Realty discussed the emergence of resilience as a major driver of financial decisions with such considerations as insurance premiums necessitating a greater understanding of the risks associated with resiliency. Edgar Westerhof, a flood and resiliency expert at Arcadis spoke of the Dutch experience related to sea-level rise and the fact that long term assets such as real estate will be forced to contend with such challenges.
Overall, the panelists and presenters expressed optimism going forward and it seems our cycle has plenty of runway. Despite the many challenges facing our industry and the built environment in general, innovative solutions and the innovators behind them are there to tackle these issues.
Seattle YLG Leadership Team member