Some of the country’s sharpest real estate minds gathered for the University of Miami’s annual Real Estate Impact conference on February 5th at the Four Seasons Hotel on Brickell Avenue. This year’s event featured keynote addresses from Barry Sternlicht, founder, chairman & CEO of Starwood Capital Group and Arne Sorenson, president & CEO of Marriott International. An all-star panel included executives from Whole Foods, Lennar Corp, Cushman & Wakefield and Gensler.
Topics discussed ranged from e-commerce and the proliferation of online grocery shopping, to new building standards in the face of climate change and what lies ahead for the hospitality industry.
While the conference covered a wide range of subjects, they were all connected by one common thread- virtually every real estate sector (be it retail, industrial, office or residential) is being rapidly disrupted by new technology. The conference’s expert speakers agreed that today’s developers, owners and brokers are all being faced with one choice: adapt or die.
Our firm sponsored the event, and our team was on-hand to bring our loyal readers a few key takeaways from the conference:
Slow and steady wins the race when it comes to economic growth: The economy is doing well thanks to low unemployment and a tax cut that will improve corporate earnings (especially in the real estate sector) over the short-term, according to Sternlicht. The chief concern fueling uncertainty, he explained, is whether wage growth and interest rate hikes will spur inflation; and whether wages can keep up with things becoming more expensive. Sternlicht warned that rates must rise gently, or we are at risk of the market “freaking out.”
Forward-thinking brands will survive the “retail apocalypse”: Sternlicht said retail centers that offer a memorable customer experience will do well, which is why Starwood is revamping its malls with better restaurants and mixed-use options.
Panelist Juan Nunez, president of Whole Foods’ Florida region, believes e-commerce and brick and mortar can work together to better complement each other. Nunez believes that by 2024, about 40 percent of millennials will shop for groceries online, which is why Whole Foods is redesigning its stores to adapt to online orders and why Amazon Prime members will soon be able to receive groceries via delivery.
Walmart, for its part, is looking to become more diverse, said Sternlicht. The world’s largest retailer is investing heavily in innovation and e-commerce while acquiring niche brands like Bonobos, Moosejaw and Jet.com aimed at broadening its consumer base.
Autonomous cars (and trucks) will change the game: Panelist Jose Brancato, managing principal at architecture and design firm Gensler, predicted that by 2025, ride-sharing will be the dominant form of transportation, making many of the 500 million parking spaces in the US obsolete.
According to Benjamin Conwell, Senior Managing Director and National Practice Leader eCommerce for Cushman & Wakefield, driverless trucks are an inevitability in the logistics space as there won’t be enough truckers to keep up with the massive growth of product shipments. This means that driverless deliveries enable retailers to redesign their loading areas and expand their stores, since there would be less space needed for truck parking.