ULI Report Expects Augmented Reality To Have A Major Effect On CRE
If, at this time last year, you predicted Pokémon would be a major topic in Urban Land Institute's Emerging Trends in Real Estate 2017 report, you are hopefully quite wealthy today.
Of the dozens of trends ULI identified in the major report released this week, augmented reality is one of the most new and exciting. The report noted the wild success this summer of Pokémon Go and how it led people to locations they had not planned to visit.
"Since real estate, both residential and commercial, relies upon the consumer experiencing a property—almost always in a site visit—before committing to a transaction, stimulating such a visit by a technological lure can be extremely powerful," the report states.
Experts predict augmented reality could have $2.6B in real estate applications by 2025. The report suggests AR could also allow developers to collaborate better with architects and designers and can help reduce errors in property operation.
The report also discussed the growing trend of CEOs choosing to move companies downtown and the major development surge this has brought. This wave of relocation from the suburbs to downtown has revitalized cities, but the report notes CEOs are doing it in their company's best interests.
Working downtown affords these companies the ability to attract talent that wants to work, live and play in walkable urban environments and the ability for companies to penetrate these markets.
The report cites Las Vegas, above, and Detroit as two cities that have been at the forefront of efforts to revitalize their downtowns. Las Vegas spent $150M on the development of stores, restaurants and an entertainment venue around its old city hall, and another $150M in interest-free loans for startups.
Looking at the overall market, the report notes the economy's long, gradual expansion continues and doesn't appear to be showing signs of ending.
This business cycle is in its 87th month of expansion, making it the fourth-longest in US history. Macroeconomic data suggests no signs of overheating, the report says, as GDP growth has settled around 2%.
The report points to tightening construction financing as a sign that real estate has learned its lesson and will not trigger another business-cycle recession, a sentiment finance experts expressed last week at Bisnow's annual multifamily conference. Tighter lending is keeping oversupply from emerging as it often would late in a cycle, the report says, and is a sign that the real estate cycle could extend even further into the future.