“Opening General Session: Kathleen McCarthy, Global Co-Head of Real Estate, Blackstone”
The Urban Land Use Fall Meeting was held at the end of October in Dallas, TX, and commenced with an insightful chat with the Global Co-Head of Blackstone Real Estate, Kathleen McCarthy. McCarthy started by discussing the macroeconomics of global CRE and highlighted that Blackstone is seeing shorter leases as cap rates rise, creating more leverage for owners and managers.
Next, the conversation and tone shifted to the fact that the US lacks 4-6 million residential units and that supply creation is drastically decreasing due to the high cost of borrowing and international building materials. McCarthy’s suggestion to combat this deceleration is to work with local, state, and federal governments to create pro-development areas within their communities that offer tax credit incentives to builders and tax penalties to the communities that refuse to address the housing crisis. She warns that the longer we wait, the worse the problem will get, especially with the lag in construction time.
Besides the dire need for more homes and apartments, LIHTC and student housing are the company’s fastest-growing sector in multifamily. When discussing life sciences, McCarthy notes that laboratories used to be a small percentage of their office portfolio but with the growth of big data to fuel innovations and new investments that this asset class has taken off over the last 5-10 years, and growth is expected to continue.
McCarthy switched gears towards the end of her chat to focus on Blackstone’s internal initiatives and achievements. McCarthy notes that the company has doubled the number of female employees over the last 10 years and increased its awareness of women’s daily workplace struggles. Blackstone hopes these internal initiatives will serve as an excellent example for CRE offices worldwide.
“Green = Gold; Parks, Trails, and Open Space as a Catalyst for Generating Economic Value”
One of the midday sessions at the ULI Fall Meeting was a five-person panel discussing the added value of green spaces to CRE using Dallas as a case study. The panel consisted of Aaron Abelson, Principal at HR&A Advisors who manage public-private real estate strategy; Robert Kent, Texas State Director for The Trust for Public Land; Amy Meadows, President and CEO of Parks for Downtown Dallas; Philip Hiatt Haigh, Executive Director of the Circuit Trail Conservancy (which spearheaded The Loop around Dallas); and Kit Sawers, President of Klyde Warren Park (Dallas’s newest elevated park). The conversation started with the ‘08 recession spurring activity for the city of Dallas to buy up distressed properties and redevelop the city’s master plan to include more public-private partnerships focused around green spaces.
The goal for Dallas was to have park space within 10 minutes of all residents to boost the quality of life across all socioeconomic levels. So far, the city has increased its park space by 75% over the last ten (100 years through public-private partnerships and brought in $2B worth of investment to neighboring properties. The plan began as a “rails to trails movement” followed by infilling sunken highways no longer in use and converting underused raised roadways into parks. Adding more public open space to communities previously divided by infrastructure allowed more interconnectivity and business between neighborhoods.
In addition, these new parks spawned commercial activity and boosted land and home values nearby. Even in the downtown area, Dallas found that people stick around in the neighborhood after work when their office is near a park and other commercial offerings. This trend, in turn, causes more workers to want to live near the office to cut down on their commute and enjoy the newly revitalized area. Ultimately, this accelerates value creation for everyone. The workers- turned-residents, the business owners, the landlords, and the city of Dallas all benefit by adding more green space.
“In Conversation with Jeanne Gang, 2022 ULI Prize Laureate”
In the afternoon, the ULI granted the 2022 Prize Laureate to Jeanne Gang, an award-winning architect, visionary, and Founding Principal and Partner at Studio Gang. The $100k prize is awarded annually to an individual on the cutting edge of innovative processes, techniques, strategies, and insights to achieve the highest quality in development practices and policies at a global, national and local scale. This award aptly describes Ms. Gang, who was also named one of the most influential people in the world by Time Magazine.
Gang is best known for an inquisitive, forward-looking approach to design that utilizes new technical and material possibilities while expanding on the role of designers in society. Gang creates striking developments that connect people, their communities, and the environment. Her firm’s approach to every project starts with the land and the people using the land to engage the local context and better inform design and development strategies.
In Jeanne’s acceptance speech and discussion, she talks about starting her practice 25 years ago in Chicago, mainly focusing on community centers and letting nature direct the architecture. She aims to integrate high tech and low tech to be forward-thinking but familiar and believes all buildings should be designed to connect people and the environment. “Architecture sets up the intersection between people and place, like animals in a habitat. Habitats fit into an ecosystem like a building fits into a diverse city.”
Her studio is now over 150 people across four offices in Chicago, New York, San Francisco, and Paris. However, it still upholds the primary values of civic connectivity and holistic land use to drive decision-making for all projects. In her free time, Gang teaches at Harvard and leads research teams focusing on material sciences, reducing embodied carbon in building materials, and developing new construction technologies.
Her final words were on how architects and developers need to engage more with the communities they’re building in to better solve past, current, and future problems that only the locals can understand. Gang notes how nothing gives her more joy than having youth get involved because they’re the ones getting exposure to the industry, having a say in the process, watching it get built,
and finally using it for years to come.
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