encouraging their formation,
often through offers of incentives and cheaper space, as is usually the case when an industry
cluster is formed.
The activity is robust enough
that she believes there will be
significant investment opportunities in the coming years.
“Secondary markets, especially
those that have not come back
from the recession, tend to be
underpriced and tend to have a
stock of housing that is affordable,” Thompson relates. “The
startups can work with existing commercial properties, refitting
the assets, or build new ones.”
REUSE IN RETAIL CAN REAP REWARDS
One form of redevelopment that is gaining in popularity among
investors is adaptive reuse. This is certainly the case in some segments of retail, says Coleman Morris, Atlanta-based director of
retail agency leasing for JLL. More than just the redevelopment of
historic or very old properties, the ultimate focus of adaptive reuse
is on place-making, as various projects throughout the US show.
Retailers appreciate the projects in particular since, in many
cases, they align with the brand’s own positioning efforts. Morris
points to Nike with its concept of Nike Live, which it is testing
on Melrose Avenue in Los Angeles. The store concept has a pop-
up vibe and will operate similar to an experimental digital-
meets-physical retail environment. The products and services
sold in the store will be tested, the retailer explains, based on a
deep understanding of the neighborhood.
“You’re going to see less of the flagship stores that retailers
typically have and more of what Nike is doing with Nike Live,” says
Morris. “That is, taking its brand and incorporating it into a spe-
cific project to cater to the surrounding community.”
It is likely that more adaptive reuse projects will spring up in
the 8,700 certified Opportunity Zones in the US. The recently
released rules show that broadly, rehab projects in these zones
will be more affordable as the bar was lowered significantly in
terms of how much money needs to be invested in order for it
to qualify, according to Charles Clinton, chief executive officer
and co-founder of EquityMultiple.
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Let’s start the conversation.
Alexander S Beaumariage, Affordable Housing at 214-540-9129
Carolyn Nazdin, Seniors Housing and Care at 202-452-4912
“There will continue to be a premium
for locations near transit, but the
value of those neighborhoods is in
more than just their access to transit.”
LEE MENIFEE, PGIM Real Estate