ULI’s Emerging Trends in Real Estate® 2020, premiered at Fall Meeting in Washington D.C., got a regional twist recently when ULI Los Angeles recruited PwC Partner Mitch Rochelle to present some of the report’s findings. The 2020 edition got attention at Fall Meeting by identifying trends such as “Hipsturbia” (cool suburbs) and by ranking hot “markets to watch.” (Los Angeles is number nine. Austin is number one.)
At the December 11, 2019 ULI Los Angeles event, held at Gensler, Rochelle was guardedly optimistic about the coming decade. In tempestuous times, he said (and we’re certainly living in them), investors shift to real estate.
“There are two ways wealth has accumulated over time: precious metals and real estate,” he said. The financial markets are “headline-dependent” – witness the Dow Jones’ rash responses to tariff news, for example. But “real estate is the winner in times of uncertainty.”
He touched on some of the ironies of the current U.S. economy which remains in the longest expansion in history. Yes, this sustained growth has also held the lowest rate of employment growth, but that gradualness helps prevent the overall economy from overheating. Yes, business investment is very slow – another troubling sign – but it continues to flow to tech (This, too, may be troubling if big, unsustainable disruptors such as Wework create a significant tech bubble. Some observers put Uber in the same camp. This particular insight was shared at the Fall Meeting Emerging Trends presentation.)
“Throughout history real estate returns have been among the most stable, out-performing stocks and bonds,” announced Rochelle. He summarized with an acronym: TINA, which stands for There Is No Alternative to real estate.
As if to demonstrate the relationship between real estate and tech, the event panel was a quartet of property-tech disruptors of one kind or another:
Tech venture capitalist Brad Greiwe, Co-Founder and Managing Partner of Fifth Wall.
CRE / CRM (customer relationship management) expert Brandon Sedloff, VP of Sales/Managing Director of Juniper Square.
The consensus among them was that real estate remains a late adopter in tech solutions, and that “proptech is still in its infancy” (as Israel said).
“All real estate companies need to be tech-enabling,” said Paliobeis. She shared that her co-living firm had to create its own tech systems because they are not available off the shelf. But this turned out to be a “blessing in disguise” as the investment has paid off in returns and efficiencies.