Emerging Trends in Real Estate - Microsoft

Emerging Trends in Real Estate?

United States and Canada 2020

Emerging Trends in Real Estate?

2020

Contents

1 Notice to Readers

3Chapter 1 Shifting Focus to the Decade Ahead 4 Easing On Down the Road 6 The Siren Call of TINA 10 A New Menu for Markets 11 Housing: The Great Unraveling 13 A Community State of Mind 14 Hipsturbia 15 Boomers and Beyond: Let's Think This Through 17 ESG: A Sustainable Trend 19March of Technology: The What and When

of Disruption 21Infrastructure: Washington Fumbles; States and

Cities Pick Up the Ball

23 Chapter 2 Markets to Watch 23Top 20 Markets for 2020: A Tight Race toward

the Top 31 Markets That Are Major Capital Magnets 33 Stalwarts, Surprises, and Determined Competitors 36 Markets Aligning with Expectations 38 Treasures Ripe for Discovery? 41Potpourri: Thrifty Choices, Boutiques, and

Special Situations

48 Chapter 3 Property Type Outlook 49 Industrial 53 Apartments 62 Single-Family Homes 65 Office 69 Retail 73 Hotels

76Chapter 4 Emerging Trends in Canadian Real Estate

76Putting Customers at the Heart of Reimagined Spaces

77 Powering Digital Transformation through Proptech 79 Navigating Policy and Geopolitical Uncertainty 81 Tackling Emerging Business Challenges 83 Property Type Outlook 87 Markets to Watch 91 Expected Best Bets in 2020

96 Interviewees

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Editorial Leadership Team

Emerging Trends Chairs

Mitchell M. Roschelle, PwC W. Edward Walter, Urban Land Institute

Authors

Hugh F. Kelly Anita Kramer Andrew Warren

Authors, Chapter 3: Property Type Outlook

Timothy Corzine, Retail Melinda McLaughlin, Industrial John McManus, Apartments and Single-Family Homes Janet Pogue McLaurin, Office Mary Sullivan, Hotels

Contributors

Katharine Burgess John Chang Elizabeth Foster Beth Burnham Mace Molly McCabe Ryan Severino Carl Whitaker

Senior Advisers

R. Byron Carlock Jr., PwC Miriam Gurza, PwC, Canada Frank Magliocco, PwC, Canada Christopher J. Potter, PwC, Canada Nick Way, PwC Steven Weisenburger, PwC

ULI Editorial and Production Staff

James A. Mulligan, Senior Editor David James Rose, Managing Editor/Manuscript Editor Brandon Weil, Creative Director/Cover Designer Deanna Pineda, Muse Advertising Design, Designer Craig Chapman, Senior Director, Publishing Operations Owen Benge, Senior Associate, Capital Markets and Real Estate Payton Chung, Director, Capital Markets and Real Estate Jacob Hite, Intern, Capital Markets and Real Estate

Emerging Trends in Real Estate? is a trademark of PwC and is registered in the United States and other countries. All rights reserved.

At PwC, our purpose is to build trust in society and solve important problems. PwC is a network of firms in 158 countries with more than 250,000 people who are committed to delivering quality in assurance, advisory, and tax services. Find out more and tell us what matters to you by visiting us at .

? 2019 PwC. All rights reserved. PwC refers to the U.S. member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see structure for further details.

? August 2019 by PwC and the Urban Land Institute.

Printed in the United States of America. All rights reserved. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage and retrieval system, without written permission of the publisher.

Recommended bibliographic listing:

PwC and the Urban Land Institute: Emerging Trends in Real Estate? 2020. Washington, D.C.: PwC and the Urban Land Institute, 2019.

ISBN: 978-0-87420-438-4

PwC Advisers and Contributing Researchers

Abhi Jain Aki Dellaportas Alex Howieson* Ali Abbas* Alpa Patel* Ami Patel* Amy Brohman* Amy Matula Andrew Alperstein Andrew Nickel* Andrew Popert* Anthony Di Nuzzo* Ashley Somchanh* Ashley Yanke* Avery Munger Aynsley Price* Brett Matzek Brian Ness Bryan Allsopp* Bud Thomas Calen Byers Carly Stallwood* Carmelo Scali* Cathy Helmbrecht Charlene Rodenhiser* Charles Campany Chris Dietrick Chris Vangou* Christian Sedor Christina Howton* Christina Louie Christine Lam* Christopher Bailey Christopher Mill Court Maton Courtney McNeil Curtis Gagne* Dan Ryan Dana Miccio Daniel D'Archivio* Danielle Desjardins* Darren Speake* David Baldwin David Baranick David Seaman David Swerling David Voss David Whiteley* Dheeraj Bisla* Dillon White Douglas Struckman Dylan Anderson Dylan Shuff Ed Faccio Elliot Kung Emily Pillars Erin MacDonald Ernie Hudson* Eugene M. Chan Evan Cohen

Francis Miu* Fran?ois Berthiaume* Fred Cassano* Fr?d?ric Lepage* Gary Meltzer Gimena de Buen* Gina Mandarino* Glenn Kauth* Harry de Haas* Heather Lashway Helen Zarokostas* Howard Quon* Howard Ro Ian Gunn* Ian Nelson Ira Shaw Isabelle Morgan Jacqueline Kelly Jacqueline Kinneary Jasen Kwong* Jason Hirschfeld Jason Ho* Jason Pagliaro* Jeremy Lewis Jesse Rosenstock Joannie Brulotte* John Bunting* John Crossman John Rosano John Satelmajer Johnny Cannon* Jonathan Osten* Joon Chan* Jordan Bennett* Joseph H. Schechter Joseph Moyer* Joshua Beaver* Karin Coetzee Katelyn Weiss Kelsey McLeod* Ken Griffin* Ken Su* Keri Zader Kevin Fossee Kevin Koons Kevin Ng* Kristen Conner Kristina Derek* Lanie Potgieter Laura Eldridge* Leah Gates* Leah Waldrum Lee Overstreet Libarid Guluzian* Lori Watson* Lori-Ann Beausoleil* Macy Anderson Mais Jarjour-Ouzon Matt Manza Matthew Rosenberg

Matthew Manza Maxime Lessard* Megan Andrews Miranda Hardy* Mori Contreras Munezeh Wald Nadia King* Nadja Ibrahim* Natalie Cheng* Nick Ethier* Nicole Stroud Patricia Perruzza* Paul Mehlman Peter Harris* Philippe Pourreaux* Qiyan Mai Rachel Klein Rahim Lallani* Rajen Shah* Rajveer Hundal* Ray Witkos Rebecca Lyons* Renee Sarria Ricardo Ruiz Richard Fournier Rick Barnay* Rick Munn Rob Sciaudone Ron Bidulka* Ron Walsh* Rosanna Musto* Roxanne Carrier* Ryan Dumais Sabrina Fitzgerald* Sam Melehani Santino Gurreri* Scott Williamson Sean Bailey* Sergio Lozano Spyros Stathonikos* Stephen Crisafulli Steve Baker Steve Tyler Steven Tirado Tanya Hill-Larivi?re* Tara Jangle Thomas Knox Thomas Kozak Tim Bodner Tom Knox Tom Wilkin Tressa Teranishi* Trevor Toombs* Warren Marr Wendi Pope* Yousuf Abbasi Zac Konings* Zoe Funk

*Canada-based.

ii Emerging Trends in Real Estate? 2020

Notice to Readers

Emerging Trends in Real Estate? is a trends and forecast publication now in its 41st edition, and is one of the most highly regarded and widely read forecast reports in the real estate industry. Emerging Trends in Real Estate? 2020, undertaken jointly by PwC and the Urban Land Institute, provides an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the United States and Canada.

Emerging Trends in Real Estate? 2020 reflects the views of individuals who completed surveys or were interviewed as a part of the research process for this report. The views expressed herein, including all comments appearing in quotes, are obtained exclusively from these surveys and interviews and do not express the opinions of either PwC or ULI. Interviewees and survey participants represent a wide range of industry experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers, and consultants. ULI and PwC researchers personally interviewed 750 individuals, and survey responses were received from more than 1,500 individuals, whose company affiliations are broken down below:

Private property owner or commercial real estate developer: Real estate advisory or service firm: Homebuilder or residential land developer: Private equity real estate investor: Bank lender: Investment manager/adviser: Equity REIT or publicly listed real estate property company: Institutional equity investor: Private REIT or nontraded real estate property company: Institutional lender: Mortgage REIT: Real estate debt investor: Securitized lender: Other entity:

27.6% 23.6% 11.9% 11.3%

6.5% 6.5% 3.9% 1.8% 1.7% 1.0% 0.9% 0.8% 0.7% 1.8%

Throughout this publication, the views of interviewees and/or survey respondents have been presented as direct quotations from the participant without name-specific attribution to any particular participant. A list of the interview participants in this year's study who chose to be identified appears at the end of this report, but it should be noted that all interviewees are given the option to remain anonymous regarding their participation. In several cases, quotes contained herein were obtained from interviewees who are not listed in the back of this report. Readers are cautioned not to attempt to attribute any quote to a specific individual or company.

To all who helped, the Institute and PwC extend sincere thanks for sharing valuable time and expertise. Without the involvement of these many individuals, this report would not have been possible.

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