Why I Believe in New Urbanism

Why I Believe in New Urbanism

Over the past several years, I have read extensively regarding the concept of “New Urbanism” – an over thirty-year old approach to rethinking how we live, work, and play.  Simply put, up until the 1950s we built communities where people could easily walk to needed destinations (the store, the theatre, school) right out their front door.  Following that, a trend towards sub-urbanism emerged, where people sought lower housing prices by moving out of town into newly developing communities. 

Eventually, enough people move into these sub-urban communities that various retail stores begin to emerge (sometimes as a part of a thoughtful plan, sometimes not). These often evolve into “power centers,” which I’m sure you’ve seen: a grocery store and drug store combination, some national chains like Panera Bread, Starbucks, and Taco Bell. Surely there will be a Michaels, Wal-Mart, and Home Depot nearby. Maybe an IHOP for the weekend family pancake stuff-yourself-a-thon.  

Regardless, there will be one inescapable feature: asphalt, and lots of it.  You will find yourself driving to one destination (“Best Buy”) to pick up a new case for your iPhone, then reenter your car to drive less than a mile to fight the parking lot struggle again…this time for a brief stop into a trendy sports store (“REI”) to get some new hiking shoes.  You’ll need them, but not for scenic walks. Rather, for regular treks across pavement as you drive between unremarkably designed storefronts every weekend. 

These power centers differ little from town to town and have homogenized our lives into a shared experience that many find unsatisfying.  Enter the concept of “New Urbanism.” Like any transformational idea, New Urbanism attracts cult-like apostles, rabid naysayers, and about everything in between.  

Given the limits of space in this article, I cannot begin to address all of the positive aspects and negative criticisms of the New Urbanism movement.  Some good starting points on that are in the book, “Community by Design” by Hall & Porterfield and many resources at the Congress for New Urbanism website (www.cnu.org). 

But for me, creating town centers with parking on the periphery, walkable streets, and mixed-use commercial centers can accomplish many admirable goals:  

  • It invites the inclusion of green spaces and gathering places in the center of town.  
  • It prioritizes interesting architecture that gives a community its own sense of being.  
  • It “feeds itself” as retail and commercial spaces co-mingle with residential spaces, providing a ready consumer market.  
  • It promotes smaller, locally-owned businesses that become an integral part of emerging, dynamic communities. 
  • It increases market values (especially compared to traditional development) and maintains valuations over time. 

Recently, I observed the purchase of an older commercial complex with the announcement, “Dollar General and Sally Beauty to Anchor New Commercial Development.” I am not trying to belittle either of those businesses, but the mental picture of what this development would look like was crystal clear long before opening the article. I think we can do better with just a little extra effort and that is core to my belief in New Urbanism.  It is also the mission of our company, Premium Property Trust, as we find ways to use good design and New Urbanism principles to positively affect the lives of communities. 

KC Conway Friday Economist Forecast

KC Conway Friday Economist Forecast

If you have time, you may want to sign up with the public link for KC Conway’s Friday Economist Forecast. KC Conway is a top real estate economist and very familiar with the markets in which Premium Property Trust operates. The update is free and will be live-streamed on YouTube. You should sign up at least five minutes early as it will start promptly at 3:30 pm EST (2:30 pm CST).

https://www.youtube.com/user/CCIMInstitute/live

REITs Have Become The New Flight-To-Quality Asset Class

REITs Have Become The New Flight-To-Quality Asset Class

Brad Thomas contributing to Forbes about the “Flight-to-Quality” where investors sell what they perceive to be higher risk investments and purchase safer investments. In this case, he’s seeing REITs as the beneficiary.

https://www.forbes.com/sites/bradthomas/2019/09/23/reits-have-become-the-new-flight-to-quality-asset-class/#5a75e46b7507

Why REITs Outperform Stocks And 3 ‘Strong Buys’ Heading Into H2 2019

Why REITs Outperform Stocks And 3 ‘Strong Buys’ Heading Into H2 2019

Jussi Askola writes about why REITs outperform stocks over the long run, noting “Any asset class can outperform over a 1-year or even 5-year time period, but you don’t come ahead for decades and decades by pure luck.”

https://seekingalpha.com/article/4288779-why-reits-outperform-stocks-and-3-strong-buys-heading-h2-2019

Trade Tensions Reinforce the Value of Real Estate Investment, Portfolio Manager Says

Trade Tensions Reinforce the Value of Real Estate Investment, Portfolio Manager Says

Joel Beam notes that REITs have outperformed “meaningfully” versus the broader market since April 30. He continues with, “The opportunity to earn consistent, high-single or low double-digit returns from a low volatility asset like real estate, with an important income component as a part of that total return calculus, is very, very attractive for long term investors…” as a potential result from trade tensions.

Warren Buffett Bought Only One REIT and It’s Exploding

This is an interesting article by Stephen McBride about how STORE Capital targets a market that is difficult for Amazon to disrupt and how Warren Buffett’s only real estate stock is found in his 10% stake in them. We also have eschewed the conventional wisdom that REITs should focus on a single property type. If diversity is a strength in your stock portfolio, shouldn’t it also be a strength of your real estate portfolio? Our focus on effective new urbanism and multi-use properties reflects our belief in an awakening desire to escape the gridlock of crowded highways and return to a simpler lifestyle.

https://www.iris.xyz/learn/equities/warren-buffett-reit/

Why “Qualified Opportunity Zones” May Be the Next Hot Thing in Investing

Why “Qualified Opportunity Zones” May Be the Next Hot Thing in Investing

In Alabama we have 158 qualified opportunity zones, with at least one in each of our 67 counties. Do you know where they are in your state? Long and short of the tax implications: Invest capital gains from any source into an opportunity zone and hold for 10 years to defer taxes on the capital gain for that hold period and then only get taxed on 85% of the gain. Further, pay zero taxes on any money generated from the investment over the 10 year hold period. Pretty compelling, don’t you think?

https://www.barrons.com/articles/tax-benefits-attract-investors-to-qualified-opportunity-zone-funds-1541851200