The Future Landscape Of Cities: Live-Work-Play, Science Centers, Medical Offices
By KIMBERLEY HAAS
The future of live-work-play communities looks bright heading into 2023 as investors figure out ways to make money in real estate with a recession looming.
A CoworkingCafe study shows that 512 live-work-play communities were built across the nation between 2012 and 2022, with another 101 in the pipeline for the next two years.
New York City is currently leading the way with the highest number of mixed-use buildings with 50. Four more are planned for 2023.
Analysts at CoworkingCafe used data from CommercialEdge and Yardi Matrix.
Doug Ressler, Business Intelligence Manager at Yardi Matrix, recently sat down with The Mortgage Note.
Ressler said the company does data research on different asset classes of commercial real estate. They have been in business since 2000.
“One of the things that we pay particular attention to is a lot of demographics. As you know, economic cycles and demographics really lead the way in terms of what we see in today’s market,” Ressler said.
Migration patterns were accelerated by the COVID pandemic and working from home has changed what people are looking for in the places they move to, Ressler said.
“So what consumers are looking for is not just the daily grind of a commute that goes downtown central, but that they can do it from home. They’d like to have all the amenities and an amenity-rich type of environment around them to live, work, and play,” Ressler said.
Developers are responding by repurposing existing asset classes to attract and retain workers, he said.
“We see a combination of different things. You have people that are developing asset classes from office into residential. They’re also being developed into life science and data centers,” Ressler said.
Ressler said multi-family and industrial structures have presented the least risk in terms of potential for investors.
Ressler said former retail spaces in strip malls are being repurposed by hospitals as medical offices, and that is a secure investment because it can lower costs.
“Rather than bring people into emergency rooms, what they’ll do is they’ll look at converting strip centers into urgent care that’s within close proximity to the actual hospital itself,” Ressler said.
The economy is now expected to show positive growth of 0.4% in 2022 before entering a modest recession in the new year.
The Fannie Mae Economic and Strategic Research Group forecasts 2023 GDP growth to be negative 0.5%, an improvement from last month’s forecast of negative 0.6 percent.
“The economy caught its breath in the second half of 2022, but that doesn’t change our expectation that it will run out of air in early 2023 via a mild recession,” Senior Vice President and Chief Economist Doug Duncan said.
Economists expect the economy to begin expanding again at a 2.2% annual growth rate in 2024.
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