Covid-19 has left a lasting "wait and see" approach on society according to new PwC and ULI report
According to PwC US and the Urban Land Institute's newly released Emerging Trends in Real Estate 2022, property investment is top of mind for institutional investors in both traditional and alternative sectors as risk remains low and rates stay attractive. Urban landscapes are facing change, as new land uses and updated zoning allows markets to evolve.
PwC US and the Urban Land Institute further reports all these factors remain under the cloud of climate urgency, prompting new ways of standardizing and measuring ESG requirements. As businesses approach environmental, social and governance (ESG) issues in the property sector, it will be imperative to take a holistic approach and create a strong overall strategy -- to help create sustainable advantage and value.
"There is clearly an optimism within the real estate industry for its prospects in 2022 and there is undeniably a weight of capital available for investment," said Anita Kramer, Senior Vice President of ULI's Center for Real Estate Economics and Capital Markets. "Yet the ground is shifting and we are seeing long-term and lasting changes in a range of key areas including the relative prospects for property sectors and locations, the extent to which we use various property types, and our attitudes toward the industry's role in climate risk and decarbonization. Emerging from this is the opportunity to lay the foundation for a new vision for our communities, one in which we repurpose obsolete buildings, reduce carbon emissions, and create more affordable housing."
"An abundance of investable capital, low interest rates and a continued demand for many product types has created a positive environment for our industry. However, not everything is rosy, and real estate still has its challenges ahead. There are rising costs, pending tax reform, and new infrastructure spending that could impact the labor market," says Byron Carlock, PwC Partner and U.S. Real Estate Practice Leader. "There are also various social issues, in which the industry can take a leading role in helping to solve. Some of those include affordable housing, ESG focused city planning, and neighborhood inclusiveness. It's important that regulators, policy makers and business leaders work together to establish trusted standards that guide responsible behavior in our new post-pandemic reality."
Trends Highlighted in the Report:
The Top 10 U.S. Markets in Emerging Trends in Real Estate 2022
Sun Belt cities continue to dominate the Top 10 overall real estate prospects, powered by strong growth, homebuilding outlook, affordability and job prospects:
1. Nashville, Tenn.
2. Raleigh/Durham, N.C.
3. Phoenix, Ariz.
4. Austin, Texas
5. Tampa/St. Petersburg, Fla.
6. Charlotte, N.C.
7. Dallas/Fort Worth, Texas
8. Atlanta, Ga.
9. Seattle, Wash.
10. Boston, Mass