Private Mortgage Orlando – Millennials To Continue Flocking To Hipsturbias And 18-Hour Suburban Cities

A recent article in the Bisnow magazine paints a rosy picture for 2019. From the article are such pieces of information as the following:

Millennials To Continue Flocking To Hipsturbias And 18-Hour Suburban Cities

Research and data have dispelled the long-held myth that millennials are city-flocking suburbia haters. With aging millennials now hitting their early 30s, many are turning to the suburbs with their families. More than 2.6 million Americans relocated from the city to the suburbs in the last two years, according to the U.S. Census Bureau as reported by ULI. This has renewed investor interest and confidence in select non-gateway markets, ULI reports in its 2019 Trends survey. “Hipsturbias” or “Urban-burbs” have been used to classify these suburban markets with increased walkability and access to public transit that so resemble urban metros.

A U.S. bank senior researcher told ULI the following:

“The first phase is millennials moving to the suburbs for larger, more affordable homes and access to schools, so adequate single-family and multifamily housing will be necessary. Retail follows rooftops, so retail development to meet the new residents’ requirements will follow. Finally, you may begin to see more emphasis on employment centers as residents decide they want to work closer to where they live.”

Investors To Favor Industrial, Multifamily And Retail Assets In The New Year

It comes as no surprise that industrial real estate assets would be an anticipated favorite for investors in 2019, along with multifamily assets, according to ULI’s 2019 Emerging Trends report. Deep-pocketed investors like Blackstone Group continue to gobble up entire portfolios of industrial assets at a rapid pace this year, such as its purchase of industrial REIT Gramercy Property Trust for $7.6B, a portfolio of last-mile logistics assets from Harvard University for nearly $1B and a portfolio of 41 warehouses from FRP Holdings Inc. for $359M.

More interesting is the fact that retail is expected to attract interest from investors in 2019, particularly those assets ripe for redevelopment and upgrades.

“Many shopping center properties are just not going to come back as successful retail assets. But while few have been reduced in price to mere land value, many are well below replacement cost and have good locations for alternative uses,” ULI reports. “If a site is sufficiently large, mixed-use is a great option for close-in suburbs looking to exploit maturing millennials’ desire to enter their next life-cycle phase. There also is an opportunity to turn the tables on the e-commerce trend that fostered the obsolescence by redevelopment into distribution facilities.”

Construction Industry To Continue Grappling With High Costs, Labor Shortage

Rising construction costs were the No. 1 real estate and development concern for respondents that participated in ULI’s Emerging Trends in Real Estate 2019 survey. On a scale of one to five, five being of the greatest importance, construction costs ranked 4.59, with land costs and housing costs and availability following close behind at 4.14 and 4, ULI reports.

“Rising construction costs may be the most untold story of 2018 that should become a material story in 2019,” CCIM’s Conway said. Conway identified a number of factors exacerbating cost and labor challenges in the construction industry, including a decline in immigrant construction laborers following the financial crisis, crazy superstorms as a result of climate change that has led to massive rebuilding efforts across the country, and tariffs and the trade war.

“Key materials like steel, … bathroom fixtures from China, lumber from Canada, etc., are impacted. Pay attention to the quarterly earnings reports from construction materials companies as to the kind of input cost increases being experienced. Caterpillar, for example, reported solid sales in Q3 2018, but a large rise in material inputs like steel. The result is growing pressure on margins.

“That is the key takeaway regarding construction labor and material costs increases — margins are going to be squeezed, cost overruns incurred, and values under pressure unless rents and [net operating income] can be increased to cover the increasing costs of new construction,” Conway said.

Retail Bankruptcies To Slow, Retailer Earnings To Stabilize

“The retail real estate industry has experienced a significant change in recent years, and the transformation is profound and will continue throughout 2019. The convergence of brick-and-mortar and online retail will continue to create major seismic shifts in the industry,” TD Bank Head of Commercial Real Estate Gregg Gerken told Bisnow.

Though a wave of retailers filed for bankruptcy and shuttered stores this year — including Sears, Mattress Firm, Nine West and Claire’s — the circumstances surrounding most store closures next year should be vastly different, CBRE’s Cordero said.

“I think the general industry sentiment is that 2017 was probably the peak year [for retail closures]. I think there will continue to be closers in 2019 — it’s hard to say whether we’ll have more or less — but I would say a lot of the closures that we’ll see in 2019 will be more about what we call portfolio rationalization or optimization than they are about retailers that are failing.

“Retailers in lots of cases do need to close stores to reorient their portfolios — so I do expect closures in 2019, but I don’t really [associate] a lot of those closures as dying or failing retail, it’s more of morphing and adjusting retail,” Cordero said.

Even more, information can be found in the article, however reading it will not help if you are not ready to act on it. Banks can take a long time to approve a mortgage (6-8 months at times) and yet sellers do not want to wait. Why miss out on these properties when a Private mortgage may be the answer. There is an experienced Private mortgage lender that lends in Orlando who can help you. Check them out at