The annual ULI Emerging Trends Report is now available. Last week ULI St. Louis invited Christopher Ptomey, a national ULI representative, to present the emerging trends and what it means for St. Louis.

Emerging Trends in Real Estate® 2021, a joint effort by PwC and the Urban Land Institute, provides an outlook on real estate investment and development trends in the United States and Canada.

“2020 has been a year of unprecedented challenges and constant fluidity,” said Ptomey.

The residential market is high and seeing increased profitability. Forecasting for this market in 2021 is expected to stay strong.

“One of the things we are currently working to solve is what we believe will be an eviction crisis early next year. 2020 has required a lot of housing assistance. As forbearance and rent extensions come to an end, there will be people who will be evicted,” said Ptomey.

Trends like working from home and “the Great American Move” are creating significant demand on residential markets, especially in the Sunbelt and the suburbs.

A recent study suggested that 52 percent of people have the ability to work from home, at least part time. Further data collected suggested that these employees will continue to be able to work from home even after it is safe to return to the office.

Working from home and the public health concerns identified in 2020 will impact corporate spaces and the commercial real estate market.

“The increased space needed per employee will essentially offset with work from home. While people will need more space in the office, a majority of them will only need to come into the office a few days a week,” Ptomey said.

Warmer climates, suburbs, and more affordable communities are seeing the greatest demand and influx of residents.

“The “Great American Move” has accelerated this year. Financial difficulties have people moving in with family members, while the flexibility of work from home has people looking for more desirable locations to live. As a result, the single-family home market is booming,” said Ptomey.

Retail has also seen some significant shifts this year that will impact the outlook of 2021.

“COVID sped up what we were already seeing – a shift to e-commerce. This has had an unfortunate ripple effect for brick and mortar. We are anticipating a rent reset and a phase of vacancy. The data says brick and mortar is not dead. We fully expect it to rebuild, but it will probably look different,” said Ptomey.

Many of the challenges that have plagued 2020 will have continuing impact in 2021. Less local business means less taxes. Less taxes, coupled with the higher expenses in public health and safety, has 65% of cities delaying or canceling projects.

“There will definitely be a recovery period, but change brings opportunity. We have an opportunity to innovate and be intentional about improving our communities in an equitable way. Diversity is for everyone,” said Ptomey.

St. Louis itself has an emerging trend in national geospatial.

“St. Louis has an opportunity to reinvent it’s profit basis. The Midwest is a hot destination these days and St. Louis has many great communities. The city is poised to attract in national geospatial.,” said Ptomey.

The emerging trend seems to be that there is work ahead to innovate and rebuild the new way of life in the wake of 2020. Let’s make it great!