What a tumultuous decade for real estate this has been. A 10-year span that began back in 2010 in the wake of the Great Recession is ending with one of the largest real estate cycles ever.
So what were the top trends of the past decade? That’s just what we were wondering when we convened a small panel of real estate experts to name those movements. From the reinvention of shopping malls to the rise of co-living spaces, and from the ascension of mixed-use developments to the transformation of city neighborhoods fueled by foodie culture, these were the trends our panelists felt merited the spotlight as we recap the decade of the 21st Century’s second decade.
EB-5 financing. The emergency of EB-5 financing became a critical capital source to finance some of the nation’s most significant developments, including Hudson Yards, Florida’s Miami-to-Orlando Virgin Trains and a number of others.
Shopping mall reinvention. With the retailing transformation ushered in by e-commerce, many traditional shopping centers became obsolete during the decade. What to do? The answer was to convert malls into mixed-use live-work-play developments featuring apartments, hotel rooms, offices, dining and fun.
“Now these places tell a story, create an experience and allow visitors to tell their story,” says Andrew Hellinger, co-principal of Urban-X, which is creating River Landing Shops & Residences in Miami. “Retail developers are increasingly attracting more experiential uses and different elements for those looking for retail therapy.”
Rise of co-living and co-working. As affordability issues force folks to live in smaller, shared spaces, and the start-up spirit encourages entrepreneurs to toil in shared spaces, co-living and co-working is helping transform the design of many urban buildings.
Public-private partnerships. The surge in these ventures is helping cities, counties and colleges upgrade aging infrastructure. Public-private partnerships have become among the best ways for money-hungry cities to fund big, costly projects, while shifting the financial risk to the private sector.
Industrial real estate takes star turn. The rise of ecommerce has helped spark a revision in thinking about warehouses. Demand for fulfillment centers and distribution hubs has helped elevate them to star assets among institutional and private funds.
Charter schools a new asset class. Among private investors seeking stable, rock solid income sources, buildings occupied by charter schools have become a prized plum.
Mixed-use ascendant. The live-work-play revolution has spurred an increasingly ravenous public hunger for walkable, mixed-use destinations where one can bunk down at night, earn a paycheck by day, and also enjoy some R&R after work. “People want a community where they can live, work and play without having to get in a car and drive,” says developer BTI Partners’ managing partner Noah Breakstone, currently creating the 52-acre Westshore Marina District mixed-use project on the western edge of Tampa, Fla. “These types of mixed-use projects inject new life into communities, bringing new residential developments and retailers to centrally-located areas that have been overlooked in the past decade.”
Foodie culture boosts restaurants. Eateries are on the leading edge of redevelopment endeavors aimed at transforming neighborhoods by creating destinations for food aficionados. A case in point has been the rise of Miami’s downtown, as well as crowd-pleasing Magic City enclaves like Wynwood and the Mid River District.
Opportunity zone confusion. Propelled by tax benefits, the investment community has rushed headlong to secure the finest opportunity zone deals. But murky rules have prevented the program from becoming all it could or can be.
Entertainment meets retailing. Adding entertainment to retail centers has been one solution to the hurdles presented by ecommerce. “As a land-use attorney, I saw first-hand how retail developers began adding entertainment uses to existing and new retail projects, giving rise to ‘retailtainment’ destinations,” says Miami-based Miguel Diaz de la Portilla. “My client Triple Five Miami, which is developing American Dream Miami, the largest entertainment and shopping destination in the country, is a perfect example of this trend . . . Initially, plans called for 65 percent retail and 35 percent entertainment, but those plans had to be updated to meet today’s consumer preferences.”
The revised plans, he added, call for the percentages to be just the reverse.