Notes from the ULI Fall Meeting #2

At the 2011 ULI Fall Meeting here in Los Angeles, the Urban Land Institute released its annual edition of "Emerging Trends in Real Estate" for 2012. You can download the entire report as a .pdf by clicking here.

From the press release:

For 2012, U.S. real estate players must resign themselves to a slowing, grind-it-out economic recovery following a period of mostly sporadic growth, confined largely to a few real estate markets that offer the primary 24-hour transportation hubs with global access, according to respondents of the Emerging Trends in Real Estate® 2012 report, released today by PwC US and the Urban Land Institute (ULI).

According to survey respondents, enduring economic doldrums and the absence of dynamic jobs generators are weighing on real estate markets. The hard reality is businesses have learned they can increase profits with less space – while people can’t afford bigger living spaces.

While the nation’s lackluster employment outlook delays filling office space, the related drag in consumer spending compromises growth in retail and industrial occupancies and rents. “Job creation is clearly the critical ingredient for a sustained recovery in commercial real estate and the market participants we surveyed uniformly struggled to identify new employment engines.

As a result, businesses are focused on squeezing profitability out of productivity gains, and families forced into belt-tightening are using less square footage, which follows ‘The Era of Less’ sentiment we forecast last year,” said Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC. “In 2012, investors expect pricing to level off in the top markets – and overall ‘buy’ sentiment will subside, selling appetites will increase, and more owners will hold until the economy untracks. This is part of 'the new normal' as investors are coming to grips that they may not be selling for more than they paid.”

Survey participants predict that 2012 will see an increased supply of properties for sale; however, due to economic uncertainty, interest among buyers may diminish...

To read the entire press release, click here.

To download the entire report in .pdf format, click here.