A&A Meeting Report: Finding Opportunity in Changing Times

Posted on September 27, 2013 in Viewpoints by admin

Our products occupy city blocks and air space, hopefully becoming a lasting mark on our landscape.

In a time of constant change, they stand still; permanently attached…or do they?

At this summer’s Acquisitions and Asset Management meeting, we learned that the key to success in today’s economy rests on our ability to recognize and capitalize on flexibility. From the concept of expanded floor plates to “workouts” with debt partners, the ability to be flexible with our entire network is this era’s necessary skill.

As Sophocles offered, the flexible tree will stand…the stubborn, torn up, roots and all.

One of the many consequences of the Great Recession was the continuing collapse of urban neighborhoods around the United States. However, often through tragedy comes opportunity; and, with investors looking for higher yields and value-add opportunities, could their attention be turned towards urban non-core areas? Are there enough resiliencies left?

“Some say it’s too risky – too complicated,” said Mark Taylor of JAIR LYNCH, “but if you look at it holistically, we can accelerate change that leads to institutional investment opportunities.”

The urban renewal initiatives of the 1960s and 1970s were predicated on the idea that the way to save the village was to destroy it, and “that didn’t work too well,” Taylor said. In the 1980s and early 1990s, local entrepreneurs succeeded with some small-scale projects, but downtown cores still had few places open after business hours and little appeal to residents. The situation reached a tipping point in September, 1994 when the TV show “Friends” debuted, glamorizing urban living for young people. “Urban went from scary to cool overnight,” Taylor said. “Four months later, we delivered a 120-unit apartment building in downtown Denver with top-of-the-market rents, and had it fully leased in 21 days – and we saw the same thing happening in other cities.” Since then, “costs have gone up but demand has only increased – cities hit a critical mass and started feeding on their own success.” …

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