2024 Fall Issue of Urban Land - 14

Editor's Desk
A Different Use of Space
The fall issue or Urban Land-Downtown
Redux-speaks to the ongoing seismic shift in
how humans engage with their urban environments.
Although this change constitutes a flatout
unknown, experts such as Richard Peiser,
the Michael D. Spear Professor of Real Estate
Development at the Harvard Graduate School of
Design, and co-authors Evan Kindler, a master's
student, and Stephen Paynter, global head of
research for Gensler, are crunching the numbers
and making highly educated guesses about
what we might expect.
One key takeaway: " It is likely that conversions
will amount to 20 percent to 50 percent
of all new housing in cities. " Their article (p.
90) considers floorplates-before and after-
and takes a line-item look at conversion costs
derived from three recent case studies. Although
obsolete office buildings aren't a panacea for
the housing shortage, these buildings probably
will play a bigger role in bringing cities back to
life than previously thought.
The need to reshape cities is complicated
by the large amount of debt coming due.
" Roughly $2 trillion in commercial real estate
loans will mature by the end of 2026, " writes
Brian Bailey (p. 85), a subject matter expert and
senior policy adviser for the Federal Reserve
Bank of Atlanta, in " Real Estate's Wall of Maturities, "
where he also notes that " Issues driven by
higher debt costs and declining values continue
to have profound implications for [commercial
real estate]. "
Other costs are rising, too. For example,
Moody's analyzed insurance costs as a share of
gross revenue since 2018 for properties backing
CMBS loans (p. 108). Upshot: insurance
premiums doubled, and some commercial real
estate owners face rising costs due to climate
risk. Rebuilding and building infrastructure, office
redevelopment, solving the housing shortage,
and addressing climate risk in our cities will
undoubtedly rely on public/private partnerships.
Senthil Sankaran, Amazon Housing Equity
Fund's managing principal, discusses the importance
of partnerships in deploying $3.6 billion
14
URBAN LAND FALL 202 4
BEFORE
AFTER
to preserve or create 35,000-plus affordable
homes (p. 81). The Amazon fund does not
develop or own property. Instead, it acts as a
financial accelerator, forging partnerships with
highly motivated, mission-focused developers
and owners building affordable housing with
deals already etched but in need of that last
bump to get a project over the finish line.
Amazon demonstrates how a corporation can
make a difference as a nontraditional player in
the housing sector.
Less talked about but also a major challenge
for cities and communities is what to do
with rapidly declining houses of worship, which
once served as neighborhood nerve centers.
Rick Reinhard, principal of Niagara Consulting
Group and an associate at the Lakelands Institute,
writes (p. 101), " Although good examples
of reuse and redevelopment exist for declining
places of worship, the scale and wide distribution
of these struggling buildings is daunting. "
Research shows more than 100,000 of these
religious structures will be forced to close in
coming years in the United States alone.
To address the unique challenges each city
faces, the ULI Services Program spent the past
18 months working with municipalities across
the United States to re-envision their downtowns.
Nolan A. Marshall III, of the South Park
BID and a ULI ASP panelist in San Francisco
and St. Louis, is quoted in the report: " We are
seeing a different use of space across downtowns
and more street and public infrastructure
transformations across the board. "
SIBLEY FLEMING is editor in chief of Urban Land.
The Cornerstone Building
in Calgary was converted
by the Astra Group in just
one year. Astra Group CEO
Maxim Olshevsky notes
that the major savings
were in bypassing the
foundation, structure,
and elevator costs. He
emphasized that the
project would not have
been possible without the
incentive program and the
easy permitting process.
AS TR A/PE OPLE FIRS T DEVEL OPMENT S
2024 Fall Issue of Urban Land

Table of Contents for the Digital Edition of 2024 Fall Issue of Urban Land
