What is Take 5? Take 5 is a five-minute recap of key takeaways from ULI Louisiana’s latest events. In the spirit of member connectivity and continuous conversations, we invite you to pop in and catch-up on the topics you may have missed!
Opening Presentation of Emerging Trends in real Estate with Chuck DiRocco, Director of Real Estate at PwC
Chuck DiRocco, the Director of Real Estate at PwC, kicked the day off with an opening presentation that covered PwC’s report of the 2024 Emerging Trends in Real Estate.
In its 45th edition, the annual Emerging Trends in Real Estate report’s overarching theme was “The Great Reset,” determining that the industry must form new ‘norms’ and can no longer rely on past benchmarks to determine how the market will function in the future.
“Unbuckle your seatbelts because it’s probably going to be a slow, careful ride. Disruption won’t happen like a roller coaster. It’s gonna be slow going, and you’re gonna have to do your homework when it comes to specific details and specific places and specific property types”. – Chuck DiRocco
A New Era Comes to Focus”: Key themes in the Emerging Trends Barometer
The great reset in the economy and commercial real estate
Persistent and challenging interest rates
Investor attitudes are shifting and varying, there is a diverse industry outlook – itching to buy mixed with guarded optimism.
Overall US Markets to Watch (in order)
Nashville
Phoenix
Dallas / Ft. Worth
Atlanta
Austin
San Diego
Boston
San Antonio
Raleigh
Seattle
Investment Property Sectors to Watch:
Multifamily Housing: current pricing: fair | buy, hold, or sell? Buy
Single-family housing: current pricing: over | buy, hold, or sell? Buy + hold
Industrial Distribution: current pricing: fair | buy, hold, or sell? Buy + hold
Hotels: current pricing: fair | buy, hold, or sell? Hold
Retail: current pricing: fair | buy, hold, or sell? Hold
Office: current pricing: over | buy, hold, or sell? Sell
Panel 1: Strategies in Affordable Housing
The first panel of the day consisted of an engaging conversation with Nicole Barnes of Jericho Road Episcopal Housing Initiative, Oji Alexander of People’s Housing+, and Jonathan Leit of Alembic Community Development, moderated by Michael Merideth of VPG Enterprises, and current Chair of ULI Louisiana.
“Affordable housing is so much bigger than putting units and houses on the streets. It’s establishing the foundation for wealth creation and family stability within the City.” – Michael Merideth, VPG Enterprises, and current Chair of ULI Louisiana
The biggest challenges developers in affordable housing face:
Insurance
Lack of flexibility in funding
No State low income tax credit program, no housing trust funds at the local level
Untapped inventory and financing restrictions make it difficult to fill the supply.
“As affordable housing developers, we must be creative and innovative in our financing methods. For a recent portfolio, we leveraged new market tax credits to build 19 homes instead of 11. Alternative investing formats, and alternative sources for capital is crucial when it comes to affordable housing.” – Nicole Barnes, Jericho Road Episcopal Housing Initiative
What is the Community Land Trust (CLT)?
“A CLT operates on a shared equity model, reducing the buying barrier by retaining a portion of the property's equity to keep it affordable for future buyers, allowing current residents to build equity. This setup enables access to new, energy-efficient construction at reduced prices, but there’s a trade-off of relinquishing some equity for affordability. The thought of buyers is that ‘if I have to forego some equity to become a homeowner, that’s worthwhile.”– Oji Alexander, People’s Housing+
“Real Estate is about serving communities. We need more champions to push on this message – the message that gap funding is needed, a State Low Income Tax Credit Program is needed. Financing sources at the local level are needed.” –Jonathan Leit, Alembic Community Development
Panel 2: Financing Projects in Exacting Times
The second panel of the day consisted of an informative conversation with Annie Clark of Finance NOLA, Dr. Carol Friedland of LaHouse Research & Education Center and Associate Professor at LSU AgCenter, and Jarrett Cohen of JECohen Co., moderated by Cullan Maumas of the New Orleans Redevelopment Fund.
“We cannot afford to NOT build resiliently. The cost to rebuild structures and communities post natural disasters, and the cost to cover hotel costs for people displaced from their homes, is far greater than building green in the first place.” – Dr. Carol Friedland
Key topics addressed:
Greenhouse Gas Reduction Fund (GGRF)
Insurance cost savings opportunities: Fortified roof systems can save up to 40% on insurance, and Wind Mitigation Surveys can save up to 25%
The impact and influence of building energy codes on insurance
Community Solar Farm initiatives within the region
“The development, architecture, engineering, construction community needs to continue being a voice behind getting more [GGRF] funds into our community. Capital for green energy, transportation, and energy efficient retrofits.” – Annie Clark
“If you conservatively finance your projects, valuation volatility should not affect you much. Loan to Cost is where it becomes a factor. Whether it’s short term or long term, it’s still a consideration.” – Jarrett Cohen
Panel 3: Delivering on ULI’s Mission
The third and final panel of the day consisted of an engaging conversation with Rashida Ferdinand of Sankofa CDC, Kimberly Boudreaux of Catholic Charities of Acadiana, and Renee Chatelain of Arts Council of Greater Baton Rouge, moderated by Paula Peer of Trapolin Peer Architects.
Keynote Presentation: the State of Downtown
Davon Barbour, CEO of the Downtown Development District, wrapped up the day with a keynote address over lunch that focused on the State of Downtown.
Active developments:
$802M in planned development
746 new hotel rooms under construction (14 projects)
377 housing units under construction
DDD’s Core Services:
Public safety initiatives
DDD rangers
Police details
Private security
Case study example: SafeCam NOLA Program
Public Space Operations
Enhanced cleaning services
24/7 deployment
Public policy
Economic development & creative placemaking
Marketing & communications
And that’s a wrap! Another highly successful Emerging Trends Event in the books. Thank you to all of our sponsors, ULI members and volunteers for making this event possible (special shoutout to the 2024 Emerging Trends Planning Committee!), and to the Contemporary Arts Center for hosting this event. Until next year!