Please respond by RSVP with attendees’ names to Emily Weberman to Emily.Weberman@ULI.org.

Ben and Brandon took the first hour of the presentation to give an overview of Popularise and Fundrise – how they work and how they are transforming the real estate industry. The last half hour of the presentation consisted of a question and answer session between Ben, Brandon and the ULI audience.  Ben provided a sense of how revolutionary crowdfunding and crowdsourcing could be for the real estate industry.  The internet has already changed and “disrupted” other industries – and now the potential exists for that change to translate over to real estate and development.  The technologies could “democratize” how people invest and participate in the development process – brining change to older institutions and processes historically associated with real estate finance.

By Jamie Gorski

We heard from Zipcar & Buzzcar founder Robin Chase on her desire to live in a world where people care about sources and consider the consequences of their lifestyle, where individuals and companies thrive in a mutually beneficial and efficient system, and where opportunities to participate abound. In her keynote, Ms. Chase encouraged innovation by working together and making use of excess capacity, and suggested taking typical business models and turning them inside-out – creating businesses that share excess capacity on a platform with participation and shared value.

Ms. Chase used this idea when she envisioned Zipcar, a car sharing service in which cars are shared by the hour or day, instead of being owned. “It’s as easy to rent a Zipcar as it is to get money out of an ATM,” she stated.  The proof is in the numbers, with Zipcar boasting 700,000+ users, more than 10,000 cars, and offering numerous environmental benefits.

Bed sharing was another example of an efficient business model. In just four years, Airbnb, an online service that provides a platform for individuals to rent unoccupied living space as short-term lodging for guests, has created more than 250,000 listings in 30,000 cities and 192 countries, and successfully booked more than 10 million nights worldwide. More rooms have been booked on airbnb.com than with the largest hotel chain in the world.

Ms. Chase also noted other companies that have exemplified the innovation and symbiotic model she advocates, including: Couchsurfing, Etsy, Skpe, Fiverr, Flickr, Facebook, and Topcoder.

Harriet Tregoning, director of the DC Office of Planning, moderated the session and asked attendees to offer examples of excess capacity in real estate. Lobbies, amenities with no public access, empty retail and office space, malls, and rooftops were all mentioned. Ms. Chase urged owners of real estate to find alternative uses for these spaces with excess capacity, and suggested they consider allowing more pop-up spaces in huge, vacant retail locations, permit short term retail & commercial leases and allow commercial kitchens to be used by food producers.

Ms. Chase encouraged creating mutually beneficial and efficient businesses, and provided a thought provoking discussion on how her proposed business model can be used in the future, beyond transportation and mobility issues.

By Emily Washington

Barbara Schaefer McDuffie, Director of Baker Tilly moderated a ULI Trends Conference panel on the ongoing redevelopment in Montgomery County’s White Flint. The panel featured Don Briggs, President of Federal Realty Investment Trust, Diane Schwartz Jones, Director of Permitting Services for Montgomery County, Bill Hard, Executive Vice President of LCOR, and Francine Waters, Senior Managing Director of Transportation and Smart Growth for Lerner Enterprises. They discussed their roles in the redevelopment process, representing the public and private sectors.

Early on in White Flint’s redevelopment, both county officials and developers recognized infrastructure financing as a challenge. While initially, the developers favored Tax Increment Financing, in which the growth in property taxes spurred by this development would be used to pay debt taken out for infrastructure, Schwartz explained that county officials vetoed this approach because of the uncertainty involved in predicting future tax revenues. “The bonds would have been issued because the county couldn’t control development timing. A TIF would have counted against our debt limit, meaning less borrowing potential for schools, roads, and other county priorities.” Briggs said he came to agree with the county’s perspective because of Montgomery County’s reputation for having the political will to provide high quality public services and because of the county’s strong balance sheet.

He explained that instead of a TIF, he came to support the county’s favored financing method of a Development Impact Tax. “Developers didn’t intend for the county to pay 100% of needed infrastructure improvements,” he said. “ The question becomes, ‘how do you captures the private sector?’ It’s easy for landowners to build roads on their own property, but we chose a different tranche. We chose a Development Impact Tax that provides a surcharge on private landowners in the district because everyone’s land values will be going up as a result of this project.”

Infrastructure changes on the 400-acre site include a new grid network of streets to provide an option for automobile transportation aside from Rockville Park. Additionally, the White Flint Development Partnership has hired AECOM to provide strategies to transform Rockville Park into a grand boulevard with the hope of making this thoroughfare more accessible to pedestrians and bicyclists. While White Flint has Metro access that provides commuters with a transit option to reach DC and other destinations, the transit plan includes rapid transit on Rockville Pike to provide a commuting option aside from personal automobiles for shorter trips.

The three developers working in the White Flint area are all also stakeholders in the Tysons Corner redevelopment. They commented that the development process in Fairfax County has differed significantly from Montgomery County because in White Flint, the developers have been able to work together to jointly develop infrastructure plans. In Tysons Corner, 35 property owners are involved in the redevelopment, too large of a group to reach consensus on providing these public goods. While the developers in White Flint are competing for tenants, at the same time this small group or stakeholders is dependent on one another for the area’s overall success.

By Leslie Braunstein

Housing the “gray tsumani” of aging baby boomers –call them “seniors” at your own peril – was the subject of a concurrent session at the ULI Washington Real Estate Trends conference.

John K. McIlwain, ULI senior resident fellow/J. Ronald Terwilliger Chair for Housing, kicked off the panel by summarizing his detailed study Housing in America: The Baby Boomers Turn 65. Todd Harff of Creating Results, David Mayhood of The Mayhood Company, Bozzuto Management Company’s Julie Smith, and Perkins Eastman’s Dan Cinelli made the following observartions:

• When the over-65 generation says they want to “age in place,” what they really mean is that they don’t want to live in an institution. Many are ready and eager to move.
• Our culture is defining a new time of life after the children have left the nest; the baby boom cohort is the first to fully take advantage of this “second adulthood.”
• Local zoning regulations must be adjusted for increasingly converging uses, such as age-restricted housing on college campuses, allowing public use of high school libraries and other facilities, providing living space for caretakers, etc.
• Today’s CCRCs (continuing care retirement communities) emerged from a health care model; why not use a hospitality model instead? Unbundling the care element from housing allows development of more affordable options.
• The boomers are such a large and diverse cohort that there are opportunities to create many different types of housing, such as co-housing, affinity group living, and other niches.
• Bozzuto’s research shows that older residents have twice the income as younger renters, use onsite amenities extensively, adore their pets, and like a walkable urban environment – but not one that’s “gritty.”

By Leslie Braunstein

With 40 percent of today’s office space not being used and a decreasing amount of work that has to be done in an office by office workers, why bother with buildings at all? That was the question posed by ULI Washington Real Estate Trends conference keynote speaker David P. Lathrop, Director of Research and Strategy at Steelcase, Inc.

Lathrop described his company’s research agenda, which is looking deeply into how human beings actually function in workspaces and in other aspects of their lives. He pointed out that in the pre-industrial era, there was no real separation be3tween work and life; the post-World War II era gave rise to tall office buildings reflecting hierarchical business organizations and designed to symbolize status and rank. The future, while we can’t quite see it from here, is likely to include more collaborative work models and spaces.

Teaming Up for a Common Regional Goal
By Michael Polaski

Prominent industry leaders came together for a panel discussion entitled “The New Regional Economy – Shifting the Paradigm in a Post Stimulus World” at the annual Urban Land Institute (ULI) Washington Real Estate Trends Conference held on April 10, 2013.  Moderator Robert McCartney of the Washington Post focused the discussion on the need for the public and private sectors to focus on creating a new regional economy and suggestions for how this could be attained.

The session kicked off with an interview with Dr. Dorothy Robyn, Commissioner of the Public Building Service for the General Services Administration (GSA). Robyn discussed how GSA can be a better partner with the private sector and make decisions that benefit the regional economy.  One example of how this could be accomplished is the GSA moving into underdeveloped areas of Metropolitan D.C. such as the Alcohol, Tobacco and Fire Arms (ATF) Headquarters moving into NoMa, and the Department of Transportation move to Southeast Anacostia.

Robyn also stressed how competition will ultimately benefit the region as a whole.  The best example of this, which is also one of the hottest topics of discussion at the conference, is the competition for the Federal Bureau of Investigation (FBI) Headquarters. The current headquarters, the J. Edgar Hoover Building on Pennsylvania Avenue, is aging, doesn’t meet the agency’s security needs, and is not conducive to their desire for a more collaborative work environment. GSA is looking to trade this space for a new Headquarters in the National Capital Region, and the competition is fierce.  GSA received 30 responses to their Request for Information (RFI), and Robyn says it is taking several issues under consideration, including: the East-West commute (Prince George’s County), the cost of the land, underused land near metro stops, and FBI needs. The next step GSA will take is the issuance of a Request for Proposal (RFP).

Panelists Shyam Kannan, Managing Director of Planning at WMATA, Tony Kinn Director at the Virginia Office of Transportation Public-Private Partnerships, and Peter Shapiro, Executive Director of Prince George’s County Revenue Authority, all discussed the current issues at hand that are effecting our regional economy. Kannan explained WMATA’s capacity issues at stops like Rosslyn, VA and the desire to better balance the regions transit demands.

Kinn talked about regional issues such as the HOT Lanes on the Beltway and I-95 and the value of public-private partnerships for funding some of these massive undertakings.  The next big issue he is looking to tackle is I-66 in Virginia.  He expects a RFI or RFP shortly to help I-66 move people more efficiently and improve quality of life by simplifying their daily commute.

After his plea to GSA to move the FBI Headquarters to Prince George’s County, Shapiro stressed the need for a regional plan, and more of an “us” and “we” mentality.  He believes Public-Private Partnership (P3) will play a key role in furthering our regional economy.

All the panelists emphasized the need for a bipartisan organization and local community input to drive focused talks on a regional view of improving our economy.  For more information on this topic, please consult ULI’s Regionalism Initiative Council brochure entitled Regional Leadership, Vision to Action.

By Emily Washington

At ULI Washington’s recent Trends Conference, Ellen McCarthy moderated a panel on the qualities that millennials demand as they begin starting families. The panel featured AJ Jackcon of EYA, Mary Filardo, of 21^st Century School Fund, and Sharicc Boldon of Downtown Baltimore Family Alliance. The panelists all emphasized that many millennials who moved to the District as young singles wish to stay here as they start having families, but the private and public sectors must provide a specific set of services for this to be a viable option for young families.

McCarthy explained that the biggest obstacles to DC retaining the coveted millennial demographic as this generation ages is a lack of affordable housing. While often the movement of young families to the county’s surrounding DC is blamed on poor quality schools, school quality actually ranked very low on young families’ lists of neighborhood requirements in recent survey data.

As Filardo said, “It’s a myth that schools drive people out of the city. In reality, many of the neighborhoods that once had high densities of children have been torn down, but the city continued building schools even as school age population was declining.” But she explained that this trend is likely approaching an inflection point. The Office of Planning projects that the District’s school age population will grow from 80,000 to 100,000 by 2017 and will hit 130,000 by 2022. Despite the District’s reputation for providing low-quality schools, DC schools offer some very attractive services for young families including all-day preschool for some three-year-olds and for all four-year-olds.

Jackson agreed that school quality is not a key contributor to families’ decisions when determining whether or not to raise children in the city. “The perception of crime is a bigger obstacle than schools, even though these perceptions may be out of date,” he said.  While perceived crime may continue to be a deterrent to families considering home purchases in the District, he said that he is seeing more families moving in to EYA’s projects. “What families want are places that are less congested than the Rosslyn – Ballston Corridor or Chinatown,” he said. “DC offers intangible neighborhood qualities that cannot easily be replicated in new developments. Arlington also has some great neighborhoods, but they are not affordable for many young families.”

However, Jackson explained that while millennials who move to DC as singles may increasingly stay in the city as parents, it’s unlikely that many families will select homes in multifamily buildings. “We face obstacles in building apartments for families because the construction costs of three- or four-bedroom units run about $350,000 without including land or profit.” For this reason he suggested that townhomes with shared common space may provide a better model for family housing than apartment buildings, while still achieving relatively high densities.

Sharicca Boldon said that while in the past many families have moved out of Baltimore when their children reach third grade, she sees this trend reversing. Filardo agreed, saying that retaining middle class millennial families in DC schools through high school is a key step toward achieving socioeconomic integration in these schools. “ DC neighborhoods were integrated before schools were, like we saw with Adams and Morgan [the segregated elementary schools from which the neighborhood gets its name]. Schools are still segregated in terms of race and class. In the middle and high schools we will find out if the District is succeeds in being friendly for the families of millennials.”

By Julia Davis

At the ULI Conference, the panel, charged with discerning trends in the evolving office building, tackled a broad array of topics that concern the office of tomorrow.  Moderator Rod Lawrence with the JBG Companies posed the questions to the panel which included Tony Colonna of Skanska, Michael Hickok of Hickok Cole Architects, and Brad Flicklinger with CBRE.  The panel prefaced the discussion by saying that their predictions were made with a 30-year scope.

We are seeing reductions in space by the GSA and law firms.  Is this cyclical or a function of the economy?

The consensus was that there is always downward pressure, but we are seeing contraction from defense contractors and GSA due to budget cuts and uncertainty.  With less need for support staff there is less need for real estate.  Companies are willing to trade off work space for ‘third space’ or common areas.

What is the next ‘thing’ we’re going to see in terms of pre-fab construction?

Colonna responded there needs to be a lot of collaboration to design and use pre-fab efficiently.  Hickok added that the quality should be better not worse with pre-fab because efficiencies will be high.

Are we seeing the death of the suburban office park?

Flicklinger said that we are seeing a shift away from suburban office parks, but it isn’t as bad as reported.  People are drawn to living in the city which leads companies to move into the city.  The pendulum will swing the other way when the Generation Xs and Ys move back out the suburbs.  Hickok said that there is a lot of opportunity in the suburbs although they will need to be re-zoned.  It might be a challenge to get lenders to reposition the suburban office park.  Another consideration is transportation.

What does technology mean for office space in the future?

According to Flicklinger, technology means flexibility.  For example working remotely.  Hickok felt that working remotely shouldn’t be a perk; it should be a cost decision based on employee productivity.  He added that Steelcase, office furniture provider, found that the number one reason people come to work is to see and be seen in other words collaborate.

The follow up question to that, is what does this mean for the building we’re developing?
The panel asserted that the office building of the future will cater to smaller tenants, and companies will have multiple locations rather than one large footprint.  Furthermore, developers must treat the office building of tomorrow as a conduit of services and not just square footage.  It should be in place, attractive and expressive of a potential tenant’s interests in healthcare and fitness, benefits which are hugely important to young professionals.  Space is a recruiting tool.  For example, the fitness center is not a box to be checked.  It needs to be in place and attractive.

The panel concluded that developers need to accommodate both the collaboration and concentration needs of tenants.

By Matt Blocher

The opening keynote speaker, Anirban Basu, set the stage for an exciting kick-off for the 2013 ULI Trends Conference.  Based in Baltimore, which as we were reminded, is home to the World Champion Ravens, Anirban is a serious sports fan, so it was a pleasant surprise that weaved into the presentation were many applicable sports analogies.

The first order of business was an overview of the global economy and the global financial markets.   With the tremendous amount of data that was shared, it was evident that the US economy is expanding, but not a brisk pace.  The US economy leads the majority of European economies, but continues to lag behind the strong performance of many of the advanced economies in Asia.  It was noted that the NYSE l DJIA stock exchange continues to lead the pack of all markets in the world.

As Mr. Basu began to discuss the US economy in greater detail, he noted that in May 2009, all 50 states were in a recession, which was the first time that this had happened since 1973.  Today, there are no states in recession, though there are a handful of states that are close to reentering a recession; a few states are still in a recovery mode.  He also noted that the US GDP has experienced 14 consecutive quarters of growth, which is positive, but the growth is not as robust as in past recoveries.

The focus of the presentation than shifted to the labor market.  Mr. Basu noted that there have been 1.91 million jobs created over the past 12-months, a positive sign, but yet again, not a robust as in past recoveries.  The professional services sector lead in the number of jobs created followed b the trade and transportation sector with education and healthcare rounding out the top three sectors.  It was a surprise for many of us to learn that North Dakota leads the nation with the lowest state unemployment rate; Maryland was #20, Virginia was #35 and DC was #41.  With that said, it was quickly pointed out that the Washington, DC Metropolitan area had the lowest unemployment rate (5.6%) out of the top 20 largest US metropolitan markets.

Mr. Basu then moved on to the real estate market in DC noting that our record low interest rates continue to fuel demand.  Over the past year, leading lending institutions have not tightened their standards, though they have not began to loosen many of the guidelines; thus, obtaining a mortgage for many remains out of reach.  Home sales in the US have stabilized, but growth has been limited due to the lack of production over the past couple of years.  This should begin to shift, as new permits issued on all classes of housing continue to rise.

This very engaging session ended with a few thoughts on the economic outlook for the upcoming year; both on a national and on a local level.  I would encourage you to review Mr. Basu’s presentation, as there is an abundance of excellent information contained in it.