et16 dallas-ft worth 10 21 15.pdf

Emerging Trends in Real

Estate 2016

• PwC – ULI

• 12 Month Outlook on Trends

• 37th Edition

• 1,800+ Real Estate leaders surveyed

• 75 Cities

Please characterize the expected profitability of the real estate related portion of your business in 2016:

A. Abysmal B. Poor C. Fair D. Good E. Excellent

Source: Emerging Trends in Real Estate 2015

Profitability outlook

21.6%

60.6%

17.7%

2010

Abysmal to Poor

Fair

Good to Excellent


1.1%

24.9%

74.0%

2015

Abysmal–poor

Fair

Good–excellent

Profitability outlook

Expectations are high


1.1%

14.9%

84.0%

2016

Abysmal–poor

Fair

Good–excellent

Profitability outlook still improving

Look what we found Expectations are high

1.1%

14.9%

84.0%

2016

Abysmal–poor

Modestly poor–modestly good

Good–excellent

1.6%

14.4%

84.0%

????

Abysmal–poor


Good–excellent


Deja Vu all over again? Expectations are high

1.1%

14.9%

84.0%

2016

Abysmal–poor


Good–excellent

1.6%

14.4%

84.0%

2006

Abysmal–poor


Good–excellent


What do you think the impact of instability in financial markets will be on your business?

A. Positive B. Neutral C. Short Term Negative D. Long Term Negative

Emerging Trends Barometer: Buy? Hold? Sell?

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

2010 2011 2012 2013 2014 2015 2016Buy Sell Hold

Peak Buy

Peak Hold Peak Sell


11

2016 Emerging Trends Office: A Barometer

of Change

18-Hour cities 2.0

Next stop: The suburbs … what is a suburb?

A housing option for everyone

Parking for change

12

Infrastructure: Network it! Brand it!

Food is getting bigger and closer

Consolidation breeds specialization

The return of the human touch

We raised the capital, now what do we do with it?

2016 Emerging Trends

18-Hour Cities 2.0


-30

-20

-10

0

10

20

30

Emerging Trends outlook ranking change 2010 - 2016

Survey respondents favor growth and competitive business and living costs

Markets moving up

Markets moving down

2013

San Francisco

New York City

San Jose

Austin

Houston

Boston

Washington D.C.

Dallas/Fort Worth

Orange County


2016 Dallas/Fort Worth

Austin Charlotte

Seattle Atlanta Denver

Nashville San Francisco

Portland Los Angeles

Out of the top 10

Washington D.C. (24) New York City (15) Orange County (14)

Miami (19) Houston (30) Boston (13)

Raleigh/Durham (11)


Source: Moody’s Analytics, Real Capital Analytics

18-Hour cities 2.0

Cost of Doing

Business

2010 112%

2016 99%

Cost of Living

2010 119%

2016 112%

-200%

-100%

0%

100%

200%

300%

400%

500%

600%

2002 - 2007 2008 - 2009 2010 - 2011 2012 - 2015

Ch

an

ge

fro

m P

rev

iou

s C

ycl

e

Dollar Transaction Volume

2010 top 10 Markets 2016 to 10 Markets

Recession

Recovery

Expansion

Expansion

Next stop: The suburbs…

what is a suburb?

Generations are on the move, with millennials the most footloose

Over the Next 5 Years, Where will first time homebuyers be likely to purchase a home?

A. Urban Core B. Neighborhoods closer to urban core

(20 Minute commute) C. Suburban neighborhoods offering

more urban amenities D. Traditional suburban neighborhoods

62% 67%

71%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Millenials (18 to 35) Generation X (36 to 49) Baby Boomers (50 to 69)

Where Do People Currently Live?

City Suburb

Source: U.S. Census Bureau

Next stop: The suburbs…. what is a suburb?

Who is likely to move?

Somewhat or Very Likely to

move in 5 years

All Adults 48%

Millennials 73%

Gen Xers 42%

Baby Boomers

37%

War/Silent 25%

Homeowners 34%

Renters 73%

TOTAL, 3 GENERATIONS:

6.33 MILLION PEOPLE

TOTAL: 6.28 MILLION

PEOPLE

TOTAL: 2.27 MILLION

PEOPLE TOTAL: 1.51 MILLION

PEOPLE

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

BetweenSuburbs

Within City City to Suburb Suburb to City

Mil

lio

ns

of p

eo

ple

Metropolitan Mobility, 2013 to 2014

Gen

. X

Bo

om

ers

Mil

len

nia

ls



It’s all about the kids!

Source: City Observatory, National Vital Health Statistics, U.S. Census Bureau

25%

27%

29%

31%

33%

35%

37%

39%

41%

43%

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Age

National probability of Living in city center by age of child

23.5

24

24.5

25

25.5

26

26.5

27

27.5

28

28.5

-

5.00

10.00

15.00

20.00

25.00

30.00

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

Female Millenials (Ages 25 - 35)

Average Age of First Birth

(millions) (average age)


Offices: A Barometer of Change

2000 2010 2020 ?

Number of workers per 1,000 sf

Source: Corenet Global, PwC

253 sf per worker 225 sf per worker 138 sf per worker

00’s

10’s

(894,136)

410,616

(483,520)

(1,000,000)

(800,000)

(600,000)

(400,000)

(200,000)

-

200,000

400,000

600,000

Leaving Joining Shortage

Persons

10-year labor force poses the question…

44.3%

30.6%

13.8%

11.3%

Millennials Gen X

Boomers Gen Z

% of total labor market

…Who is in charge?

Source: U.S. Census Bureau, Bureau of Labor Statistics, PwC

2016 - 2026 2026

Source: Bureau of Labor Statistics, PwC

46.5%

37.8%

6.0% 9.8%

Small Business, Big Impact

1 to 49

50 to 499

500 to 999

1,000 +

% of total employment change by company size since 2013

A Housing Option

for Everyone

Can you rent the American dream?


69.2

43.6

70.1

77.4 82.4 81.8

63.4

34.6

58

69.9

75.4 77.2

25

35

45

55

65

75

85

95

U.S. - Total Under 35 -Millennials

35 to 44 - Gen X 45 to 54 - Gen X andBoomers

55 to 64 - Boomers 65 and Over -Boomers and Older

Decline in Home Ownership % by Generation

Source: U.S. Census Bureau, Core Logic

20% 30% 40% 50% 60% 70%

New York-Brooklyn

Los Angeles

New York -other boroughs

Miami

Oakland/East Bay

New York-Manhattan

Fort Lauderdale

San Diego

San Francisco

Orange County

Palm Beach

San Jose

Boston

Inland Empire

Portland, ME

Honolulu

CapeCoral/Fort…

Providence

Dallas/Fort Worth

Average Rent as % of Median Income

30% 65% 100% 135% 170%

New York-Manhattan

San Francisco

Oakland/East Bay

San Jose

Honolulu

Orange County

New York-Brooklyn

San Diego

Los Angeles

New York -other boroughs

CapeCoral/Fort Myers/Naples

Miami

Westchester/Fairfield, NY/CT

Seattle

Palm Beach

Fort Lauderdale

Inland Empire

Boston

Washington DC-District

Northern New Jersey

Denver

Sacramento

Portland, OR

Portland, ME

Providence

Charleston

Dallas/Fort Worth

Own as % of Median Income

Parking for Change

Parking was once a must-have….

….building owners will now have options

00’s

10’s

Source: U.S. Census Bureau, U.S. Department of Commerce, Department of Transportation

64.0%

77.7%

84.1%

86.5% 87.9%

86.7% 86.3% 85.8%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

1960 1970 1980 1990 2000 2006 2010 2013

Percent of Drivers Commuting by Automobile

-25.0%

0.0%

25.0%

50.0%

75.0%

100.0%

Parking- free commuting (change

2000 to 2013)

Parking for Change

Delaying Licensure

Only 44% obtained a driver’s license with in 12 months of the minimum age

Only 72% obtained a license before turning 18

1. Not having a car

2. Ability to get around without driving 3. The cost of gasoline

4. Driving was too expensive

5. “just didn’t get around to it”

Top Reasons for not getting a drivers license:

We raised the capital,

now what do we do with it?

Source: Prequin, Quarterly real estate update, Q2 2015, Federal Reserve Flow of Funds

We raised the capital, now what do we do with it?

$0

$50

$100

$150

$200

$250

$300

2010 2011 2012 2013 2014 2015

$ m

illi

on

s

Institutional dry powder and REIT Cash

Prospects for Commercial/Multifamily Subsectors in 2016

Fulfillment Center

Warehouse industrial

Medical office

Apartment rental—moderate

Apartment rental—high

Limited-service hotels

Neighborhood/comm. shopping centers

Central city office

R&D Industrial

Student housing

Full-service hotels

Apartment rental—affordable

Suburban office

Institutional rentals of SF houses

Power centers

Regional malls

Warehouse industrial Fulfillment Center Medical office Apartment-high income Limited-service hotels Apartment rental—moderate Student housing Central city office R&D Industrial Neighborhood/community shopping centers Apartment rental—affordable Full-service hotels Institutional rentals--SF houses Suburban office Power centers Regional malls

How much longer is the current cycle going to last?

A. 6 Months B. 1 year C. 2 years D. Longer than 2 years

2016 Local Outlook: Dallas/Ft. Worth

+7%

-

1.00

2.00

3.00

4.00

5.00

2016 Sector Outlook: Dallas/Ft. Worth

Rank: #9 #5

#2 #2 #5

#1

0.00

1.00

2.00

3.00

4.00

5.00

Office Retail Industrial Multifamily Hotel Housing

Dallas/Ft. Worth National Average

2016 Comparison among markets in the South: Local Development Community

-

1.00

2.00

3.00

4.00

5.00

Dallas/Ft. Worth Investment Ratings Emerging Trends 2004-2016

© 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved.

PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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Emerging Trends in Real Estate 2016

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et16 dallas-ft worth 10 21 15.pdf

Documents

emerging trends office

real estate leaders

real estate related

high source

real capital analytics

peak sell source

hour cities

barometer of change