By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE
Urban Land Institute (ULI) Terwilliger Center for Housing Executive Director Christopher Ptomey says COVID-19 has spawned “an unprecedented and fluid situation” relative to the real estate industry and the economy overall.
Ptomey was the keynote speaker at ULI St. Louis’ Dec. 10 “Emerging Trends in Real Estate 2021” virtual forecast event, which drew attendance of more than 160 ULI members and guests. His comments were based on a recent ULI survey that polled nearly 3,000 C-suite executives nationwide about their real estate business profitability expectations for 2021.
“The outlook overall is a little bit down from last year,” said Ptomey. “About 80 percent are still responding in the ‘fair to good’ range nationally, but we’ve also seen a change at the end ranges, with ‘abysmal to poor’ surpassing ‘excellent’ for the first time in years.”
St. Louis, however, is among 18 U.S. markets known as backbone markets, according to Ptomey. Backbone markets are major metro areas that are reinventing themselves. St. Louis falls into this category, he added, thanks to unique real estate opportunities such as the emerging Next NGA West headquarters and the economic synergy it brings, as well as St. Louis’ technology and entrepreneurship corridors in downtown and midtown.
National real estate trends accelerated by the pandemic, according to Ptomey, include the work-from-home trend. The movement of Americans – to milder climates, to more affordable areas of the U.S., from cities to suburbs, from renting to home ownership and from their own homes into family members’ homes to provide caregiving – are all subtrends accelerated by the pandemic.
“Working from home has proved to be a grand experiment, according to responses from our recent survey,” Ptomey said. “Companies are looking at a series of decision points with regard to this. With regard to the impact on the office real estate market, survey respondents’ estimates range from minimal to those who say there could be an overall reduction in office demand that’s reflected in a 10 percent to 15 percent decline. How much the impact of working from home will be offset by the larger office square footage requirements specific to social distancing remains to be seen.”