HEALTH & WELL-BEING in 2021 - Building on - CenterCap Group
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Building on
HEALTH &
WELL-BEING
in 2021
ALSO IN THIS ISSUE
Retail’s future in omni-
channel and as a service
How to boost NOI with
building technology
Solving food production and
environment issues with CEA
A SUPPLEMENT TO INSTITUTIONAL REAL ESTATE AMERICAS, MAY 2021
1
CONTENTS | SPRING 2021
CEO 2 ASSET MANAGEMENT LEADERSHIP
Zoe Hughes From the CEO
Editorial Director
18 26
Wanching Leong The great REIM disruption?
ROUNDTABLE
Scott Brown,
Design Director
Julie Foster 4 Fulcrum Global Investors, LLC
32
For more information about
NAREIM, contact:
Zoe Hughes
zhughes@nareim.org
917-355-3957
99 Wall Street #1340
New York, NY 10005
Q&A: Retail as a service
NAREIM speaks with Manuel
Disclaimer
No statement in this magazine is to
Martin, global head of retail at
be construed as or constitutes Building health & Nuveen Real Estate
investment, legal, accounting, or tax well-being: The time is now
advice, or a recommendation to buy
NAREIM speaks with Jill Let’s raise a glass to 2020
or sell securities. While every effort DATA STRATEGY
has been made to ensure the Brosig of Harrison Street, Deborah Smith,
accuracy of the information in this
magazine, the publisher and
Laura Craft of Heitman, 22 The CenterCap Group
Rachel Hodgdon of the Boosting NOI with
contributors accept no responsibility
for the accuracy of the content in this International WELL Building building technology
SUSTAINABILITY
magazine and you should not rely Institute and Sara Neff of Bob Geiger, Partner Engineering
upon the information provided herein.
NAREIM is not liable for any loss or
Kilroy Realty Corporation on and Science, Inc. 36
damage caused by a reader’s the impact of Covid-19 on the CRE’s 2021 ESG opportunity
reliance on the information contained work already underway, how 28 Raphael Rosen,
in this magazine and readers are
to further improve the tenant Carbon Lighthouse
advised to do their own independent
research and to consult their own experience and how small
independent investment, legal, actions could have many
accounting, and tax advisers before BARCLAY FELLOW
beneficial long-term impacts
making any investment decision.
Readers should also be aware that 41
external contributors may represent 12
firms that have a financial interest in
Reporting
the companies and/or securities
mentioned in their contributions Finding reporting best
herein and/or may serve as an practices at the asset level
officer, director, or employee of the
John Caruso, Marybeth
companies, or an affiliate thereof,
Kronenwetter and Joseph Bridging the GP-LP reporting
Cover image: iStock.com/SkyAceDesign
mentioned in their contributions.
Neither this publication nor any part Nahas, Jr. speak with NAREIM gap with technology
of it may be reproduced or
about NCREIF PREA Reporting Brandon Sedloff,
transmitted in any form or by any
means, electronic or mechanical, Standards’ new task force to Juniper Square
including photocopying, recording, or create best practices around
by any information storage or
retrieval system, without the prior
asset-level reporting, where 38 Controlled environment
permission of the publisher, NAREIM. some low-hanging fruit Driving innovation with data agriculture: The new asset
potentially lie and benefits to Linda J. Isaacson, class on the block
© 2021 NAREIM. All Rights Reserved.
investors and managers Ferguson Partners Jacob Tannenbaum
NAREIM
32
LEADERSHIP
Let’s raise a
glass to 2020
For real estate
investors, the
uncertainty created
by the Covid-19
pandemic manifested
itself in widespread
market opportunities.
Many across the
industry are gearing
up for an exciting
2021 on the heels of
the roller coaster
that shaped 2020.
iStock.com/sommersby
By Deborah Smith,
The CenterCap Group
Dialogues | Spring 202133
LEADERSHIP
f one had paid attention to the major
Ahead of the Covid-19 pandemic, many of our
I media pundits in 2020 it would have
been fairly easy to conclude that
“
clients were already making office location choices
the sky had fallen on the real estate based, in part, on tax-efficiency considerations.
market. We think the pundits had it
plain wrong in many respects. Based on Tired of high tax climates, they had been evaluating
the conversations we have every day new regional offices in favorable tax locations, or
with owners, operators, investors and
had simply relocated altogether.
investment managers, we are not the
only ones. Let’s step back and take stock
of what we saw in 2020 that inspired
”
us and continues to do so. Through the would happen and the early movers high tax climates, they had been
uncertainty, enlightenment loomed would benefit. evaluating new regional offices in
and the enormous opportunities to favorable tax locations, or had simply
create value are, and continue to be, relocated altogether.
in the making. Change as an agent Then there is the impact of Covid-19
Let’s start with where we were at the of opportunity on already evolving shopping habits.
turn of the new decade. Conventional Then Covid-19 struck. Now the top 10 According to eMarketer estimates,
wisdom had the institutional real estate investing markets may be up for approximately 14% of all retail sales
market focused primarily on the top 10 redefinition or, at a minimum, the were conducted online in 2020, up from
or so urban US markets for investment conversation is evolving into one about 11% from the year prior. It’s a big
opportunities across all the major asset the top 25 markets, perhaps more. increase. While we can debate what the
groups — multifamily, industrial, office Covid-19 led to shake ups in where statistics mean to the relevance of malls,
and to a lesser extent retail — with a people choose to live, how they choose shopping centers and neighborhood
growing desire for investment into to work, and where and how they hangouts, it seems clear that shoppers
alternative real estate sectors, primarily choose to shop. So where are people can’t or won’t buy exclusively online.
to generate additional alpha over the going and will it be permanent? Will The pandemic has shown that physical
NCREIF Index and secondarily as a nod people physically return to work, retail centers are, and will remain, an
to evolving demographic and consumer continue working from home, or a important component of social
trends. We were also starting to see combination of the two? What about infrastructure. On a basic level, the retail
increasing numbers of institutional urban versus suburban office markets? sector plays a role in offering food,
investors globally galvanize around the Ahead of the Covid-19 pandemic, medical services and last-mile logistics
UN Principles for Responsible Investing, many of our clients were already making opportunities. While we hypothesize
encapsulating ESG and impact investing office location choices based, in part, on about the permanency of population
in their liquid and illiquid strategies. tax-efficiency considerations. Tired of migration, let’s also think about how
Real estate players realized it behooved those shifts impact traffic patterns,
them to invest time into figuring out shopping habits and lifestyle choices, in
how to support sustainability mandates. addition to what people buy, how they
The pandemic has
Our view going into 2020 was that the
concept of social infrastructure would
probably migrate from a purely housing
“
shown that physical
buy it and where. Our view is change
creates opportunity.
focus and weave its way, in some shape
retail centers are, and
or form, into every mainstream and will remain, an important The continued rise of the
niche real estate dialogue over the next niche plays
decade. It might take time, and
component of social 2020 also highlighted the role niche
infrastructure.
progress perhaps less obvious, but it
” real estate sectors play in the industry.
NAREIM34
LEADERSHIP
When the world hunkered down and abruptly
“
shifted to a mostly remote, Internet-based
motivation within local, state and
federal governing bodies to work with,
and in support of, investors.
existence, sectors like data centers and cell
towers began receiving more investor attention, as Defining the role of technology
did manufactured and affordable housing (of all going forward
In the integration of technology into the
kinds) as governments struggled to keep people in real estate sector, the new ways of doing
their homes despite increased levels of old things present exciting opportunities
for investors. We do not mean apps at
unemployment from the pandemic shutdown.
” office buildings, but how big data can be
used to improve the risk-reward
equation. The visibility technology has
Cold storage has proven to be a supply has not kept up with demand in into our daily lives from shopping
resilient asset class and has consistently any of these sectors. patterns, time spent in stores and which
performed even during times of ones, to where we go after we leave
economic distress. Consumer behavior them, is already here. If we know more
changes driven by evolving The increased focus on about buyers, sellers and consumers,
demographic trends in both suburban sustainability mandates doesn’t that mean investors are taking
areas and urban metropolises have led Then there is the increased focus on less risk for the same reward? Then there
to increased online purchases of not sustainability mandates. The real estate are the cost efficiencies associated with
only traditional retail products, but also industry is a long way from developing substituting artificial intelligence for
fresh and frozen foods and produce. consensus on what it means, and how labor costs. New construction
Consumers are demanding more “farm to, effect impact investing. To be clear, technologies are here, too. Technology
to fork” products and for them to be it is not ESG and shouldn’t be confused can enable us to provide faster, cheaper
delivered fresh and just in time. Cold with it. At its foundation, impact and more efficient ways to build and
storage also plays a central role in the investing is an old concept; it is about replicate real estate assets — and it can
logistics supply chain for serving the dual mandate of generating also be used to replicate (or supplement)
pharmaceutical storage, as well as life positive social (or environmental) what people do in underwriting, building,
sciences and medical services. These change and generating financial returns. managing, buying and/or selling
trends have been catalyzed by Covid- Put differently, it requires taking ESG properties. We are only in the first inning
19, and coupled with undersupply, are principles and executing them into a of capturing the value technology will
making institutional investors pay distinct investment strategy. For real bring to the real estate industry.
attention to this sector. estate, it has easily been identified with So, 2020 wasn’t all bad. This isn’t the
Similarly, when the world hunkered improving the resilience of vulnerable return of the last financial crisis. The
down and abruptly shifted to a mostly communities and providing access for real estate market of 2021 is marked by
remote, Internet-based existence, improved lifestyles, improved health uncertainty, but so far there isn’t a credit
sectors like data centers and cell towers services and livelihood opportunities. A crunch. That makes it unique and
began receiving more investor straightforward example is affordable exciting to be a part of. Let’s raise a glass
attention, as did manufactured and housing. As the boundaries of impact and get back to work. u
affordable housing (of all kinds) as investing are not yet defined, investors
governments struggled to keep people have a role in helping to define them,
in their homes despite increased levels and more importantly, to execute on Deborah Smith is Co-Founder and
of unemployment from the pandemic them. The good news is that the Principal at The CenterCap Group.
shutdown. It has become clear that pandemic is creating political
Dialogues | Spring 2021You can also read
