Re-Urbanization or Suburbanization in 2021?
MOBLZ is closely following trends and also looking to industry giants to see where they are investing. While we don’t have a crystal ball and can’t predict the future, we are anticipating that the property management landscape will look a lot different in 2021.
Sub-Urbanization or Re-Urbanization?
During the current pandemic, we’ve seen an exodus of city-dwellers to the suburbs. The reasons are numerous - more open space, less human density, and a more “opened” economy. When there is a strong economy, there’s larger demand for luxury multi-family units with top-shelf amenities in urban areas where the draw is to be near everything - the ballparks, theaters, shows, nightlife, and restaurants. While these are closed, urban area dwellers are paying for location and amenities without getting the benefit of either. Until a COVID-19 vaccine is fully rolled out, it is probable that very big challenges in the city will continue. Re-urbanization will likely happen, but not quickly. Indications are that this pandemic is going to have a long-lasting effect on the property management landscape.
Modular Corporate-Backed Housing
Recently, tech giants Autodesk, Citi, and Morgan Stanley, along with Facebook and Google, invested $55 million into a company called Factory_OS. Factory_OS builds modular apartments and homes. Using a factory to build homes (modular construction) is not a new concept, but being teamed with Autodesk, a huge CAD (computer aided design) company is allowing Factory_OS to use a lot of process automation to cut the construction costs. The theory is that this will translate to more affordable housing, quicker turnaround, and possibly larger profits. They are in the process of building an apartment complex for Google. Google is investing $1B into housing. Apple is investing $2.5B into housing.
Why are tech giants looking at housing? For many years, they had been focused on where to house employees from 9AM – 5PM for work. Now that work is not in an office for many people, they are providing their employees with great places to live and work in the same space.
What is Needed for People to Work From Home?
Employees need a good work environment and work space. Working on a dining room table is not.that. The home needs to be safe, clean, and sustainable. Employees also need really good internet. At a minimum, today’s worker needs 100Mbps download and 10Mbps upload speeds so that they can do video calls and manage all of the other virtual tasks that are required of them. However, 1 Gbps fiber is the future internet standard. For future growth and in anticipation of re-urbanization, property managers need to think about how to invest in fiber for the apartment complexes and office buildings they manage. The cost of fiber is very low at the moment and now is a great time to work on upgrades. Our suggestion is to put in trunks and a fiber connection for every building. Find who the biggest local Internet provider is and get them to do some construction and help future-proof your buildings. Alternately, what is NOT needed for suburbanites working from home is all of the urban amenities such as gyms or coffee bars. For property managers, this is important to understand. Until the current health and political landscapes settle, it may be best to invest more in infrastructure and not as much in more superficial amenities.
NOTE: MOBLZ does not endorse or have any investment in FACTORY_OS. If you are looking to build a large scale office building or apartment complex and like the Factory Built technology, look at: https://prescientco.com/. It should be noted for transparency that MOBLZ founders do own stock in Facebook, Google, and Autodesk. This information is not an advertisement or intended to be a financial statement or endorsement of any publicly traded tech giant, simply information that we are familiar with and tracking.