The rise of “18-hour cities”, changing designs in office space and the impact of gas prices were among the topics up for debate at a breakfast meeting co-sponsored by NAI Knoxville on Thursday.
Andy Warren, director of real estate research for PwC, spoke about emerging trends for 2016, including the ongoing change in office space. Warren noted that cubicles and corner offices are less popular, while office layouts with smaller individual work spaces and more amenities are gaining ground. He also cited the high percentage of office property that was built in the 1980s, adding that “we may need to start building some new office stock in the U.S.”
Warren indicated there is strong interest in “18-hour cities” — with life cycles that don’t quite match the 24-hour bustle of a New York or Los Angeles but are close. More broadly, he said investors are always looking for cities that are poised to make a leap in status. Among his markets to watch in 2016? Austin, Atlanta and Nashville.
When it comes to property types, the analyst said the industrial market retains its top spot nationally, and has gotten a boost from the rise of e-commerce. But he also indicated the industrial sector may be at its peak.
Also speaking at the breakfast was Laurel Graefe, director of the Regional Economic Information Network at the Federal Reserve Bank of Atlanta. Graefe gave a wide-ranging view of economic trends and data, including the impact of ongoing low gas prices.
She said that historically when gas prices remain low for more than four or five months, the slump causes a jump in consumer spending, but that this trend hasn’t been as pronounced during the current cycle. What’s happening instead? The economist said people appear to be “saving their gas savings.”
The meeting was hosted by local chapters of the Building Owners and Managers Association; the Institute of Real Estate Management; the Certified Commercial Investment Member Institute; and the Urban Land Institute. Sponsors were Brownlee Realty, NAI Knoxville and Tennessee Valley Title.
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