NEW YORK CITY- Donald Monti, president and CEO of Renaissance Downtowns, probably put it best during the Alternative Investment Summit's "The Next Wave of Urban Investment in Suburbia" on Wednesday afternoon in Midtown: future suburban development should be defined as “urban nodes in suburbia." The event, which explored different ways for hedge fund managers and investors to allocate their funds, showcased new urban renewal projects, like Renaissance's work in Hempstead, NY.
The company transformed the onetime “cultural mecca of Long Island” to a new glory using greatfields space. Essentially, a parking lot was transformed to a community encompassing living space And as the US population ages, realizes that public transportation and being close to it all are cost-effective and pleasant ways to live, it seems that these “nodes” will crop up with increasing frequency. At least, that’s the hope.
The aforementioned panel, however, took more of a commercial real estate approach in that it highlighted an emerging market: that of the suburban dweller who can’t afford city life, but needs related amenities nearby. With its Hempstead development, Renaissance has perhaps kickstarted a trend – or at the very least is acting as a leader and model globally, perhaps. (Monti mentioned that they will be presenting their Hempstead project in Dubai in the coming months.)
The revitalized space, Monti explained, is the kind of project that can attract national developers and create new investment opportunities. Panelist Richmond McCoy, president and CEO of Urban America Advisors, concurred, explaining that there is a “tremendous” need for such masterplanned communities encompassing apartments, offices, hotels, retail and care facilities in suburban areas. Why? Simple: city rents are just too high. Not only can these “urban nodes” benefit young families and those struggling with student debt who want dynamic living spaces, but they can go as far as to revitalize actual cities. McCoy cited how the formerly flat office market in Philadelphia is now reaching a positive “tipping point” where it becomes a place for living, working and family settlement, thanks to its academic presence, infrastructure , new sports stadium and gambling facilities.
However, in order for these communities to be a success, Aaron Fossett, president of Fossett & Associates, noted that infrastructure in the US also needs ramping up. Because of budget problems, municipality deficiencies and the anticipation of ballooning pension funds, alternative financing to improve key areas will need to be found. His solutions? “We need a new conversation,” he said, “to facilitate talks between investors and municipalities.” This discussion would promote regional and local investment partnership opportunities, but also open up to foreign investments through initiatives like the EB5 program. He described how foreign investors have indeed been active in Africa – a country in which large scale infrastructure programs have been facilitated as of late. It experienced positive growth.
The panel’s consensus seemed to be that these developments will create demand and, in turn, jobs – something extremely beneficial for areas of the US still struggling with unemployment and economic woes. While infrastructure across the country may still need improvements, as Fossett explained, what will really work is an “autonomous development model that needs to be stand-alone,” said Monti. And hopefully, in time, masterplanners and developers will be able to perfect just that.
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