The podcast discusses the 'CRE doom loop' affecting commercial real estate, highlighting a post-pandemic recovery that may be emerging.
Migration trends show young adults increasingly favor urban living for lifestyle amenities, signaling a renewed interest in vibrant city life.
A proposed optimal land use model suggests cities should balance work, living, and recreational spaces to enhance urban vitality.
Deep dives
Thanksgiving Sports and Family Dynamics
The conversation begins with hosts discussing their Thanksgiving experiences, particularly focusing on sports activities like pickleball and a novel game called walleyball. The playful banter highlights how family dynamics influence sports choices, emphasizing participation levels for men and women in these games. They consider potential changes for future gatherings and the challenges they face when vying for attention with different sporting interests. This lighthearted segment sets a relaxed tone for the conversation, indicating camaraderie among the hosts.
Understanding the CRE Doom Loop
The discussion centers around the so-called 'CRE doom loop' in commercial real estate, originally perceived as a significant threat to the economy. Experts describe the doom loop as a cycle of imbalance between supply and demand for office space, exacerbated by the COVID-19 pandemic. It leads to declining property values and reduced tax revenue for cities, creating a downward spiral that impacts urban centers. However, some experts believe the worst may have passed, indicating that the situation may not be as dire as previously thought.
Shifting Urban Dynamics Post-Pandemic
An observation surfaces regarding migration patterns, revealing a trend of young adults returning to urban centers for lifestyle amenities rather than proximity to work. This shift suggests that interest in urban living remains strong, with an increasing demand for vibrant city environments filled with recreational options. Additionally, the conversation highlights changes in public transportation usage, which is notably higher on weekends than weekdays, further emphasizing the shift towards leisure and urban experience. These insights suggest a need for cities to adapt to the evolving demands of residents.
Reimagining City Spaces
The podcast reflects on a study aimed at reimagining urban environments by advocating for diversified land use to foster vibrant city life. The analysis reveals that current downtowns often have an excess of office space, with over 70% dedicated to work uses, leading to a lack of mixed-use development. Proposed optimal percentages for urban environments advocate for a balance—42% work, 32% living, and 26% play. By reallocating space for health, recreation, and cultural venues, cities can create more dynamic areas that support both economic vitality and community engagement.
Strategies for Urban Development
The discussion includes practical strategies for urban development, specifically targeting the conversion of underutilized office spaces into residential units. Local governments play a crucial role in facilitating these changes through zoning reforms and incentives for developers. Research suggests that converting vacant office buildings could yield hundreds of thousands of new housing units, which could help address housing shortages in urban areas. The conversation emphasizes that navigating such conversions can be intricate, given that they require extensive planning and adherence to safety regulations.
Mark, Cris, and Marisa are joined by their colleague Adam Kamins and his infamous closet doors, along with Rebecca Rockey, Deputy Chief Economist at Cushman Wakefield, and Chris Leinberger, Managing Director at Places Platform. Rebecca and Chris review key takeaways from their recent study, Reimagining Cities-Disrupting the Urban Doom Loop. Among the variety of topics covered are the importance of Walkable Urban places; the optimal mix of work, live, and play in cities; how to ensure that the commercial real estate mix aligns with the post-pandemic evolution of downtowns; and Mark’s prowess in pickleball and the possibly made-up sport of wallyball.
Guest: Rebecca Rockey, Deputy Chief Economist and Global Head of Forecasting, Cushman & Wakefield
Guest: Chris Leinberger, Managing Director and Co-Founding Partner, Places Platform
Guest: Adam Kamins, Senior Director of Economic Research, Moody's Analytics
Hosts: Mark Zandi – Chief Economist, Moody’s Analytics, Cris deRitis – Deputy Chief Economist, Moody’s Analytics, and Marisa DiNatale – Senior Director - Head of Global Forecasting, Moody’s Analytics
Follow Mark Zandi on 'X' @MarkZandi, Cris deRitis on LinkedIn, and Marisa DiNatale on LinkedIn
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