ULI Baltimore Bulletin

Program Recap: Emerging Trends in Real Estate

January 25th, 2018 – ULI Baltimore hosted the “Emerging Trends in Real Estate” program at the University of Baltimore Law John and Frances Angelos Law Center. The program began with highlights from the ULI and PWC national report– Emerging Trends in Real Estate and was followed by a panel discussion on senior living and conversion trends in our region. Anita Kramer, VP of the ULI Center for Capital Markets and Real Estate, presented the report and then moderated the panel discussion featuring Cynthia Shonaiya, Principal Hord Coplan Macht, David Carliner, Partner and EVP at the Shelter Group, Janet Reynolds, Principal BCT Architects and Cary Euwer, CEO at Metropolitan Partnership.  According to Anita, those surveyed for the report feel ‘good to positive’ about the industry and anticipate a soft landing.

Some of the report’s highlights include:

1. Human capital is the most important asset thus the necessity to create smart workplaces that provide smart experiences, improve productivity and produce employee happiness.

2. “It isn’t what you don’t know that you should be worried about; it’s what you think you know.” Generation Z is here, and like the millennials and boomers, some of the predictions were inaccurate. For example, boomers aren’t retiring at 65 and most millennials already live in the suburbs.

3. Housing is at a tipping point—better technology than ever before, yet the sector faces evolving demand, a shortage of labor, and soaring lumber costs.

4. Successful bricks and mortar retail is non-boring retail as online purchases only represent approximately 9%. The industry is not dead, just evolving.

5. Opportunities abound in places such as SLC, Raleigh, Nashville, and Austin.

Anita concluded that Baltimore is doing fairly well and the 2018 outlook by sector is in line with the national outlook.

On a local level, the senior living sector continues to grow and many options are available in both urban and suburban settings. The trend, according to David and Cynthia, is urban communities in mixed-use, intergenerational neighborhoods that are walkable, offer retail and restaurant options. Urban architecture in this sector is contemporary and the interiors are hospitality-inspired. Multiple on-site dining options are now available and health and wellness options are similar to those found in multifamily developments. With that said, urban settings, unlike traditional suburban communities, come with unique issues such as restricted parking, concrete construction, higher grade windows and vertical transportation challenges, to name a few.

Trending also in both urban and suburban settings are conversions—whether from retail or office to multifamily, retail or potentially senior housing. According to Cary Euwer, it’s about evaluating underperforming assets and identifying the highest and best use of both the building and community. Janet touched on 10 Light, the conversion of a 1929 office tower to residential units with an Under Armour Performance Center located in the banking hall. Today, the team is working on the conversion of the old Alex Brown Building in order to bring much needed retail and dining options to the CBD. Conversions, unlike ground-up development, come with many challenges that can become opportunities. For example, at 10 Light, an old mechanical room became a sky lounge and the rooftop pool was created from an old water reservoir used for an antiquated sprinkler system.

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