[vimeo width="580" height="326"]http://vimeo.com/35906542[/vimeo]
Last month’s Emerging Trends in Real Estate 2012 conference, hosted by ULIsf over the course of two days, brought into focus the most pertinent issues facing industry players in the coming twelve month. The session commenced in San Francisco, with key notes from Gary Schlossberg, Senior Economist of Wells Fargo, and Charles DiRocco, Director of Real Estate Research at Price Waterhouse Cooper. Overall, 2012 appears to bring a slow improvement or stabilization nationally, but with markedly higher prospects for the Bay Area. DiRocco’s market research concluded San Francisco, “was really one market that really stood out.” It was rated 3rd nationally for best real estate investment prospects in 2012 by PWC, while San Jose came in 7th, as many of San Francisco’s positive indicators, such as job growth in the energy and tech sectors, apply throughout the Bay Area. Three major conference sub-themes are highlighted below.
A second trend recognized is the relevance of the European model as a template for America’s future cities. Spurred by a collusion of commuting costs, Gen-Y demand and an overall rise in urban living, mixed-use development has positive buzz entering 2012. Locating services, places of employment, recreation and housing all in close proximity is not only energy efficient, it provides the basis for vibrant, economically balanced communities.
New Frontiers for Office Space:
“Creative space” is emerging as a distinct category in the real estate market. Instead of leasing a building with a traditional floor plan, many tech companies seek properties with the potential for extensive repurposing. In the case of the new headquarters of Facebook, located in Menlo Park, this includes few walls, floors amenable to skateboards and social nooks with coffee tables and oversized couches. In the age of ever increasing mobility, the office environment must be designed literally outside the box, be it an enclosed office or the long standard cubicle. Peter Rummel, chairman of the ULI, recently concurred with the positive assessment of this sector, as did Dan Fasulo, managing director of Real Capital Analytics.
One obvious concern, addressed as part of the panel Beyond Redevelopment: Development and Economic Tools for CA Cities, was the potential fallout of Governor Brown’s plan to eliminate redevelopment agencies. Moderated by ULIsf Executive Director Kate White, the discussion swayed toward optimism by outlining existing opportunities. Redevelopment expert Michael Yarne, Development Advisor for the San Francisco Mayor’s Office, identified six alternative financing mechanisms, including Development Agreements, Infrastructure Financing Districts and Business Improvement Districts, which will help keep development on track given a significant change of circumstances. These tools, “can be used in an opportunistic way with private partners”, he assured, and then cited examples on multiple scales which have utilized them successfully, from the Mint Plaza rehabilitation to the extensive redevelopment underway in Lake Merced.
For more extensive reporting, visit the press site for ULIsf for links to news coverage of Emerging Trends published in the San Francisco Chronicle and Commercial Property Executive: http://www.ulisf.org/press/.
Authored by: Kara Anderson, YLG Member.