Shifting Focus For The Decade Ahead - Huatulco Real Estate

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Shifting focus for the decade ahead - Huatulco Real Estate

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Trends are by nature dynamic, running towards the futur e, leaving some conditions behind us and bringing new c onditions closer to realization. The changes happen subtl y, often so much so that they are easy to miss. Trends ar e by the way just one form of change. The world, the eco nomy and real estate businesses are subject to other kin ds of influence as well the changing trends.

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The main forms of change in the real estate industry are Trends, Cycles, Maturation and Technology. While cycles are the most prominent feature of the real estate industry, trends typically persist longer than cycles. In this letter there are some of the key trends for the coming decade. ďƒ˜

Huatulco Real Estate firms have a lot of optimism about the resiliency of commer cial real estate. We have been in one of the longest economic cycles in history, a nd the level of confidence in the real estate industry has been palpable. Property veterans see the internal conditions in the business as solid and developers conti nue to see opportunities. It is encouraging to note that the biggest and most soph isticated developers are still active. However, recessions strike economies at thei r points of excess and we have been expanding at moderate pace for a long tim e. My advice is that caution is advisable during the short run.

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A lot of money has been made from cap rate compression some of the Huatulco Real Estate is trading well above replacement cost and I would suggest that prici ng is ahead of where it should be at this point in the cycle. The consensus foreca st, however, suggests that real estate can maintain a relative edge over stocks a nd bonds at least for the near term.

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 Granular data is becoming increasingly available and many, investors, developers and real estate service professionals are informing themselves about new market s. This is shining a light on opportunities in secondary markets that may have bee n overlooked in the past.  Housing is a mess; we are building 90 percent of our housing stock for 10% of ho useholds. Whether we want to look at it or not, housing is a mess and it’s getting worse over time. Innovation and diversity of stock is needed and fast.  We are about to see a shift of generational propositions toward a more gemeinsch aft array of real estate demands, induced ironically by technology. Overcoming iso lation is a major imperative, as seen in such trends as coworking and co-living.  Cities and suburbs are evolving, and people overwhelmingly prefer the live/work/p lay lifestyle of the 24 hour city. These preferences have been validated by superio r investment returns.

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 Fresh thinking and imagination is needed to determine how to best serve the increasi ng population of baby boomers. The boomers are living longer than ever and have n ot only more but better years to live work and play. Leaders in real estate should be having productive dialogues with experts in the life sciences about a future that is alr eady coming and likely under served at least in terms of real property.  Environmental, social and governance principles are the future in real estate. ESG a wareness is high and is skewed generationally; driven forward by Millennials with a majority of them stating that ESG policies play an important role in their investment d ecision making. One wall street firm places ESG performance premiums between 10 and 40 percent in the private real estate sector.  Tech is changing everything – but we need to be conscientious about the dangers of the Internet of Things, there are many IoT back doors that need to be secured. Techn ology implementation as well as the cyber security risks and the erosion of privacy is going to amplify exponentially with the implementation of 5G which will have form a p art of the infrastructure backbone for new development moving forward. Consumers want the conveniences that it allows for, but the technology could require 400 times as much cell tower density.

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Looking to the decade ahead, it is advisable to remain agile and open to exploring new opportunities, fresh ideas and no vel concepts in real estate and technology. The trends are s howing an overwhelming desire for people to have social int eraction, ease of use and to switch between living, working a nd playing without barriers. We believe the future of Huatulc o real estate will be more service driven than space and inve stments will need more active management than ever before to be successful.

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