On November 17, ULI Atlanta held our annual Trends in Real Estate event for 2022. This report is jointly released by the Urban Land Institute and PwC and culminates insights from over 1,700 real estate and land use practitioners across the country who are interviewed on real estate investment and development trends.

Last year’s report focused on how the pandemic has accelerated trends like working from home, corporate action on social and racial equity, and movement from urban to suburban. The 2022 report cites how flexibility will drive the next decade. A central point of view among Atlanta’s panelists for this event was to proceed with cautious optimism as we enter the “age of uncertainty and leave behind the stability of the last decade”. A few key takeaways:

• Atlanta continues to benefit from positive in-migration primarily from markets like LA, New York, Boston, DC, and Chicago. In 2022, Atlanta jumped to #8 on the top 10 list, from #11 last year. Sunbelt cities like Atlanta were cited as having “solid growth prospects, business-friendly environment, and favorable quality of life” and therefore an attractive place for both a people and corporate exodus happening from Tier 1 markets. One thing is clear: Atlanta’s competitive advantage remains incredibly strong, with a cautionary tale related to housing affordability below.

• Work anywhere is an office reset, not apocalypse. Atlanta panel member Tori Kerr from Hines shared what they are seeing is office tenants using space differently rather than giving up space. Companies and individuals still need a central hub to collaborate and create – they still need to meet face to face at times. Maintaining culture is very hard to do, much less create, over Zoom. That said, a total return to office is unlikely and those designing office spaces are faced with that it is a ‘nice to have’ and not a ‘have to have’ and the quality of the office experience is that much more important. Emerging Trends 2022 notes, “Office tenants will look to redesign the space they have and do more with less to provide new ways of working, and an evolving talent model that marries hybrid and flexible work environments with company cultures.”

• Housing affordability continues to dominate discussions around economic recovery and the challenge will be can we meet the demand? The rising cost of land and tight labor market make affordability prospects tougher to attain. Doug Hooker at the Atlanta Regional Commission noted how nuanced the conversation is around affordability. While Atlanta is still a relatively affordable city when you look at the data from the market comparison of cities where Atlanta is seeing a lot of influx from. This creates a twofold problem: 1) A supply/demand imbalance as our region cannot keep up with the pace; and 2) A perception problem. Individuals are moving here from more expensive markets – and thus Atlanta is affordable to them. If you are from Atlanta, rising home prices feel much more acute and out of reach.

• On infrastructure, estimates show that Atlanta is slated to receive billions in funding from the trillion-dollar federal infrastructure bill. How will this money be spent and on what? Who will prioritize what gets funded and what doesn’t? How can Atlanta decision makers use this as an opportunity to do things differently and think about infrastructure beyond the context of roads and bridges but community infrastructure – pedestrian mobility, addressing the digital divide, and increasing the supply of affordable housing in job centers?

From the big bold projects like The Stitch and completing our trail network to the more seemingly mundane projects like sidewalks, bus stop shelters, and road maintenance, these investments can or cannot advance the ULI mission commitment of best practices for equitable and sustainable land use. ULI Atlanta membership stands by to help think through the connections between infrastructure and land use.

• Industrial has come out as a big winner during the pandemic. Remember in the early days of the pandemic when you couldn’t find toilet paper? There was a whole lot of real estate professionals spending a lot of time trying to figure out where to store it all and how to get it on the shelves. Prognostications for industrial as we near the end of 2021 is that it’ll likely be the biggest year on record – due to a confluence of factors including the growth in e-commerce and supply chain disruptions. Atlanta panel member Natalie Tyler Martin at Duke Realty shared that vacancy rates are lower than ever and absorption are the highest. Industrial is certainly having a moment and the big question is if and when that moment will end?

• Every year in Emerging Trends there is at least one item in the report that we as an industry and city are not talking about but probably should be. Coming out of the Great Recession, it was an impending labor shortage, something that seemed incongruent with what we were all experiencing. In more recent years it has been looking to the investment market in Europe and seeing the emergence of ESG, Environmental Social Governance as a critical factor in investment decisions. In this year’s report, discussions of prop-tech and mitigating climate risk stand out as two issues that we should spend some time thinking about how we best take advantage of technologies in both areas and mitigating risks for the Atlanta region.

A huge thanks to our keynote presenter Byron Carlock Jr. at PwC and local panel members for sharing their time, thoughts, and energy with ULI Atlanta membership. ULI members will have access to the videos and presentation via KnowledgeFinder in the coming weeks.