Bob Gardner, Managing Director of Robert Charles Lesser & Co., recently gave a very interesting presentation about the current trends in commercial real estate to the ULI Los Angeles District Council.
Among other trends including what areas/types of real estate are being hit hardest in the current recession and confirming the perception that credit is very tight, his presentation includes some charts showing the number of building permits applied for before, during and after several recent recessions. The trend lines don't seem to have a typical pattern from recession to recession, so are not much of a guide in themselves to how deep/long a recession will be.
Other charts show the likely effect of demographic trends (particularly the huge drop in numbers from the Baby Boom generation -- aged 43 - 62 -- which is 27% of the population, to Generation X -- aged 27 - 43 -- which is only 18% of the population, which will be succeeded by Generation Y -- now 8 - 27 -- which is 27% of the population).
Bob suggests that these demographics favor smaller (and greener) units and urban development close to transit or walkable neighborhoods, both for newly formed households seeking their first apartment/condo, and for empty nesters seeking to move down from larger houses to lifestyle product.
If you are interested, you can view Bob's presentation on his website by clicking here to see a copy. Feel free to add your comments and opinions.
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