When you have a lot of assets, modern portfolio theory — which creates portfolios to maximize return for a given risk — is the usual way of managing them. Cushman & Wakefield recently studied 15 U.S. cities. They found that much of the economic and real estate problems there is poor portfolio planning.

The report is called Reimagining Cities: Disrupting the Urban Doom Loop, created in collaboration with Places Platform. It points to the Covid-19 pandemic and the resulting fear of infection and rise of work-from-home that caused many urban doom loops. Decreasing foot traffic and falling occupancies led to tumbling asset valuations and reduced tax revenues — not just property taxes, but sales taxes that would have come from retail and entertainment businesses relying on traffic from offices.

The focus is on the 208 walkable urban places (called by the report WalkUPs) of the 15 cities. While these represent on average only 3% of a city's land mass, they are 26% of the real estate valuation, 37% of city budget tax revenues, and 57% of the city's gross domestic product.