Emerging Plays

These investment and development sentiments from Emerging Trends interviewees deserve particular attention in 2013.

1. Concentrate acquisitions on budding infill locations

“Find buildings where tenants want to be,” typically in districts where hip residential neighborhoods meet commercial areas and “not necessarily the top, most expensive buildings.” “You can’t get enough of anything near mass transit stations,” especially apartments.

Transit Oriented Development (TOD) around fixed rail is one of the most popular plays in real estate countrywide. Unfortunately, Jacksonville hasn’t investment much into the power of mass transit to spur economic development, downtown revitalization and job creation. The 2030 mobility plan and fee can lead us in this direction but the City Council is currently considering implementing a moratorium in hopes of jump starting a building pattern that’s decreasing in nationwide popularity as millennials come of age. In the meantime, expect neighborhoods, such as Riverside and San Marco, where walkable residential integrates with walkable commercial, to increase in popularity.

2. Construct new-wave office and build to core in 24-hour markets

Major tenants willingly pay high rents in return for more efficient design layouts and lower operating costs in LEED-rated, green projects. Jacksonville isn’t a 24-hour market.

3. Develop select industrial facilities in major hub distribution centers near ports and international airports.

In these markets, “the industrial sector is where the apartment sector was two years ago,” driven by tremendous demand by large-scale users looking for specialized space and build-to-suit activity. There could be opportunity for us here.

Investing in itself over the last two decades, Charlotte is now considered a leading secondary city.

4. Use caution investing in secondary and tertiary cities

Focus on income-generating properties, and partner with local operators who understand tenant trends and can leverage their relationships. Leading secondary markets include Austin, Charlotte, and Nashville. Currently, Jacksonville is not a leading secondary and tertiary community.

5. Begin to back off apartment development in low-barrier-to-entry markets

These places tend to overbuild quickly, softening rent growth potential and occupancy levels probably by 2014 or 2015. Could this be an omen for the proliferation of multifamily residential in Jacksonville’s Southside?

6. Consider single-family housing funds

Housing markets finally limp off bottom, and major private capital investors make a move into the sector.

7. Repurpose the surfeit of obsolescent properties

Whether abandoned malls, vacant strip centers, past-their-prime office parks, or low-ceiling warehouses, a surfeit of properties requires a rethink, a teardown, and in many cases a new use. These properties offer creative planners and developers a myriad of opportunities. Our neighborhoods have a plethora of obsolescent properties. What are we doing to encourage their reuse?

According to the Emerging Trends in Real Estate 2013 report from ULI, the real estate recovery will continue in 2013 as modest gains in leasing, rents, and pricing will extend across U.S. markets and improve prospects for all property sectors. Do you think Jacksonville is in good position for investors to take advantage of these nationwide emerging plays? If not, what will it take to maneuver our fortunes?

source: 2013 Emerging Trends in Real Estate by PwC and the Urban Land Institute (ULI)

For more information visit: http://www.uli.org/emerging-trends/emerging-trends-in-real-estate-2013/

Urban Land Insititute North Florida: northflorida.uli.org/</i>