Improving Sector Buoys Commercial Real Estate Women
Improving global economics and changing social trends offer encouraging signs for commercial development and near-term building prospects, speakers told the more than 1,200 attendees of the Commercial Real Estate Women, or CREW, annual conference in Miami.
Rival expansions of the Panama and Suez canals, for example, are spawning upgrades to ports and related global building and transport development, experts said on Oct. 2.
Brandi Hanback, executive vice president of industrial development at The Rockefeller Group, noted a building boom in port "specialization," such as roll-on, roll off facilities or for materials such as lumber or natural gas. Also more "inland port" distribution centers, such as in Kansas City and Bethlehem, Pa., are under way to halve freight wait times in coastal locations.
Economist Ken Rosen noted a likely recession in 2017, but one that "will be shallow. The last one is the worst you'll see." He also forecasted a 5.5% unemployment rate next year and said the current rental-housing boom is the largest in 25 years.
Rosen also sees improvements in industrial and medical development, senior housing and data center, with energy and tech growth driving real estate development in Texas, Seattle and Minneapolis.
He noted a "sharp slowdown" in Washington, D.C. economic growth, which could create a real estate oversupply since construction is still active there.
Multifamily construction will stay strong, with supply down and demand growing among those age 18 to 39, said Kim Betancourt, Fannie Mae director of economics and market research. "Capital will stay in this asset for the next two to three years," added Caroline Blakely, partner at real estate finance firm Cassin & Cassin.
Design and construction of micro-units—under 200 sq ft—are gaining traction in urban markets, such as Boston, allowing developers to "test out the model," said Tamara Roy, principal of architect ADD Inc., now owned by Stantec. "But we're still battling uphill," she told conferees.
Presenters differed on the impact of the internet on retail building. Rosen said it was "cannibalizing" real estate, but Kristin Mueller, COO of Jones Lang LaSalle, said millennials who shop on line still want "experiential retail."
George Papageorge, executive vice president at mall developer Westfield LLC, said, "The best online retailers, such as Bonobos and Rent-the-Runway, now are doing stores. They want a bricks and mortar presence. Bricks and mortar is the new black."
In a keynote and follow Q&A, former Secretary of State and first lady Hillary Clinton gave no signals on her plans for a presidential run in 2016, but she clearly reached out to potential supporters. "If we don't dare to compete, we can't know the rewards," she said, noting the conference theme. "What CREW is doing is a real model for women supporting women."
CREW President Judith Nitsch, who is chairman of Boston-based design firm Nitsch Engineering, said the group will launch its third benchmarking study on women in commercial real estate next year.
"It serves as the industry's most comprehensive report on compensation and job satisfaction for professionals, differentiated by gender," she said. "It allows us to see how much women have moved the needle and where they are making the most headway in executive or C-suite positions." Nitsch said the report will provide 10-year trend data in these areas.
The group also is developing a collaboration with MIT to launch an industry-recognized curriculum and certification program for women to attain executive roles in commercial real esate, says a CREW spokeswoman.
"Our prior research on mentors and sponsors for women in commercial real estate and risks taken by other senior women in our industry has given our members the data, inspiration, and resolve to push through the obstacles," says Nitsch. "The data crosses over many fields, including architecture, engineering, and construction - so AEC firm leaders can understand how to advance women in their firms to enhance their bottom lines."