Patrick Slevin Talks About Real Estate Trends in 2011

posted by Patrick Slevin

What can we expect to see in 2011?

The U.S. economy takes a sustainable turn toward recovery in 2011.

There’s a general consensus that residential and commercial real estate markets have survived the worst of the Great Recession.  We expect to see in 2011 modest, but diversified growth in real estate development.

The foreclosure crisis still looms over the housing market in 2011, but new jobs, low interest rates, and upticks in mortgage loans will begin the long road to housing market recovery. 

Commercial development in 2011 will collectively demonstrate growth. Medical facilities, multi-family, rail, port expansions, hotels, and energy will continue to lead development in 2011. Retailers will be encouraged by consumer spending in 2011. They will seek out new sites for infill development, albeit, very selectively. Office developers will see slight improvement in occupancy rates, but still a long way from collecting the rents they once enjoyed.

What are the implications of these trends for companies?

Jobs! Jobs! Jobs!  Corporate developers have enjoyed a bit more political leverage when proposing “new job-creating” developments.  However, corporations are not always receiving rubberstamps on projects that proffer economic and environmental sustainability.

As infill development intensifies in 2011, corporations will encounter higher-income demographics with greater political muscle.  Corporate leaders will need to recalibrate their growth strategies and community approaches.

Retail giant Wal-Mart is rolling out 20,000 square foot stores to lead its “aggressive push into urban markets”.  A smaller store presents a smaller target for community resistance in areas such as Manhattan, where the company hopes to open its first store.

The intensity and frequency of community opposition known as NIMBY continues to defeat job creating projects.  Disputes over traffic, pollution, height, density, infrastructure, environment, preservation, and character of communities will undermine billions of dollars in global real estate investments in 2011.

Earning the social license to operate remains a key element in securing project approvals in rural, suburban, and urban locations. Those companies that incorporate social sustainability to augment economic and environmental sustainability will reduce risk, grow market share and increase profits.

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