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| Opportunities & Exposures: Real Estate |
Urban Renewal
Richard M. Rosan
11/01/2004
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Downtown migration is changing the notion of “build it and they
will come.” The theme now is “build where they are.” Despite the obvious
financial potential of downtown redevelopment projects, obstacles to the fully
realized renaissance of America’s downtowns remain: high land costs, limited
land supply, difficult site assembly requirements, long chains of title and the
desire by some property owners to hold land indefinitely. One Trends respondent
notes, “We’re only in the first chapter of the changeover from sprawl to infill
and mixed-use. Many developers will be on the sidelines until they see what
works in the new environment.”
While this may be true, investors and
developers who are willing to step into the game will find the best
opportunities in cities forward-thinking enough to cater to the creative class.
A recent study by the nonprofit organization Americans for the Arts finds that
11 U.S. cities—New York, Los Angeles, San Francisco, Washington and Chicago top
the list—contain more than 10,000 arts-related businesses, institutions and
organizations. This is good news for investors, developers and property owners
in those markets, because access to cultural amenities, as well as higher
education, is a priority for this influx of new residents.
“It takes a
combination of planners, government leaders, developers and the community,”
another Trends respondent points out. “You need wise governance with a regional
view and developers who want to create something that will last.” | Richard M. Rosan is president of the Urban Land Institute, a
nonprofit education and research group. |
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