Every Friday we will share two forward-thinking investment ideas. This week we are exploring the increased importance of thoughtful development and redevelopment in housing. The concepts of safety, security, and convenience will play an increasing role in where people want to live.
Accelerated surban™ redevelopment
The redevelopment of retail centers that were already struggling will now accelerate, with the focus on surban (medium-density urban development in the suburbs). While overall construction will be down significantly compared to 2019, the developers who control the best locations and who can raise the capital to develop them will be the first to succeed. Homes in these surban locations provide the privacy and control of a home with convenient access to necessary services. Cities still want retail to be a part of their developments (and need it for tax revenue) and may allow more housing in those projects too, since those on-site residents help support the retail. Surban locations offer a strong balance between access to services and amenities and space for safety and security.
Reinforcing the master plan
Source: Nexton Community
The desire to live in a well-designed master plan will increase as the most astute developers create safer, controlled environments that consumers demand. The most important amenities will be curated parks and open spaces that provide residents the flexibility to interact when they want and create “social distance” when they need to. Master plans that incorporate conventional and active adult housing provide the opportunity for distinct spaces but allow families to connect when they need to will take on increased importance. And at a time of uncertainty, developers and master plans with proven track records for performance are demanding the most attention from buyers. Master plans offer the opportunity for renters some of the same sense of community and open space they are craving right now, and we expect rental opportunities in MPCs will rise.
As buyers search for new homes remotely, we are seeing them gravitate to strong websites for master plans that provide “one-stop shopping” for detail on amenities, housing, schools, and nearby services such as retail. And of course the best developers are working to cohesively promote their communities and their builder partners. Newland Communities has done a masterful job of promoting the value of “home” for its builders, particularly at its Nexton Community in Summerville, SC.
Our team has a wide breadth of strategic and restructuring advice in all real estate asset classes. Contact Ken Perlman, Lesley Deutch, or any of our team members to talk about how we can help you find your strategic advantage in this unprecedented time of uncertainty.
We will continue our weekly webinars for our research subscribers, who are going to help our firm through to the proverbial light at the end of the tunnel. Their willingness to share insights with us during these times is making us all smarter. We are so fortunate to have them, and we are certainly willing to let you join the club by contacting Sara Newton-Mahony.