Finding the perfect home is a challenge. Some homebuyers have their preferences when it comes to suburbs or cities, quiet neighborhoods, or busy one. Today, we are going over the pros and cons of purchasing a house close to a school. If you have kids at school or college-aged, this is for you!
Pros
Affordability
Many neighborhoods that have schools nearby have low-cost properties. This is because a lot of them are rented by students who can’t afford something expensive. This results in the value of the houses not being so high, so if you are looking for something more affordable, this could work for you.
Playground Nearby
This is a huge advantage for parents that have young kids. You are not going to need to pack a car to go to a park, as it is walking distance to your home. Some of them have fences, which allow kids to stay safely by themselves, and they may even have basketball courts and other amenities.
May Increase Property Value
Houses near a school — especially a good school — have increased value due to demand from parents that want to live closely. Many of them are willing to pay more for a property that is close to a prestigious school. Homebuyers might have to increase their budget by 10 – 20% to live in these places, so it is important for sellers to know this.
Kids can walk to school
The good news here is that parents who live close to their child’s school can avoid the pick-up/drop-off lines. Another good point is kids can exercise by walking to school, the parents will save money with bus passes, and they won’t need to wake up so early.
Cons
Increased Traffic
During the hours for drop-off and pick-up, the traffic could be heavy in the area. Additionally, if the school is really big, it can change the quality of the air and increase pollution. There may be some parking inconveniences as well.
Noisy Neighborhood
A place near a school will have many kids playing together and will be very noisy. For those who like a quiet and peaceful area, this may not be for you. Usually, the sounds cease after school ends, but these places generally have many extra-curricular activities for the kids after school.
May Be Harder to Sell
Some homebuyers don’t consider buying homes close to schools, even if they are good properties. Another point is that the value of the house can change depending on how good the school is, and a school can either increase or decrease the value of your property, depending on its reputation.
These are the pros and cons of living near a school. Now you have the know-how to choose what fits best for you and your family!
The penthouse on top of one of New York City’s oldest skyscrapers has become available. Located in a historic Lower Manhattan building, the unit is available for $2 million.
Billed as one of New York City’s “crown jewels,” the full-floor penthouse in the landmarked Liberty Tower offers an unusual aerie, where the owner is at eye level with the ornamental decorations that adorn the exterior.
Upon its completion in 1979, the notable building was “one of only a handful of skyscrapers,” according to the New York Times. “Its striking Gothic style, the centuries-old inspiration for cathedral spires that reach into the sky to approach the divine, is central to the tower’s romantic appeal.”
Living room (Brown Harris Stevens)Dining room (Brown Harris Stevens)Sloped ceiling (Brown Harris Stevens)Bedroom (Brown Harris Stevens)Bathroom (Brown Harris Stevens)Views with building ornaments (Brown Harris Stevens)
Now known as Liberty Tower, the Gothic Revival-style building designed by Henry Ives Cobb initially opened as office space. The law office of Franklin D. Roosevelt was one of the first tenants of the 33-floor tower in 1910. (FDR later served as president, from 1933 to 1945.)
Soon after World War I, Sinclair Oil acquired the building, and in 1979, the structure was converted into residential apartments.
Unlike many sleek monoliths of the modern era, this historic tower, with its terra-cotta facade and ornate design, has more of a Notre Dame Cathedral vibe than a typical New York City skyscraper. The exterior is decorated with birds, alligators, flowers, and gargoyles.
Designated a city landmark in 1982 and added the following year to the National Register of Historic Places, the building also received a preservation award from the New York Landmarks Conservancy in 2010.
Last sold in 2005 for $958,000, the apartment could bring quite a windfall if it sells close to its asking price. Still, as penthouses in Manhattan go, the price could be considered a relative deal. Especially from that perch overlooking the city.
“Views of the Hudson and East rivers and the Wall Street Canyon are spectacular,” says the listing agent, Richard N. Rothbloom with Brown Harris Stevens. “And at eye level, right outside each window, are large sculptures of falcons, lions, and fleurs-de-lis that decorate the top of the building.”
The top-floor unit, with two bedrooms and two bathrooms, spans the entire 32nd floor, a total of 1,700 square feet. The living space boasts a dozen windows with southern, western, and eastern exposures, under 11-foot vaulted ceilings in rooms that have the “dramatic slopes of a garret,” as the listing description puts it.
And we know why. Rothbloom notes that the top floor was “formerly the attic of landmark Liberty Tower.” That’s one fancy crawl space!
The foyer opens onto an expansive living room, featuring a wood-burning fireplace, nooks, office, and home theater. The kitchen looks out to a dining room, which can serve both for daily meals and to hold formal gatherings.
The primary bedroom includes a closet system and a double-vanity bathroom with a combination tub and shower.
A second bedroom, currently used as a library, also comes with a bathroom with a glass-enclosed shower.
Other details include hardwood and marble flooring that runs throughout the home. The space also features a central HVAC system, as well as a washer and dryer.
The pet-friendly building is staffed with 24-hour door attendants, porters, and a live-in superintendent.
The location is convenient to dining and shopping at the Oculus, Eataly, and the redesigned South Street Seaport.
For those with offices in the Financial District, that’s in the neighborhood, too. Subway lines converge at Fulton Center, and there’s also quick access to Citi Bike, and the PATH train at the World Trade Center station.
Considering moving to Philadelphia? Before you start apartment hunting, learn about the local rental market. Make sure you know the average rent in Philadelphia to get your budget started!
Average Rent in Philadelphia
The average rent for a Philadelphia studio apartment is $1,415
The average rent for a Philadelphia 1-bedroom apartment is $1,721
The average rent for a Philadelphia 2-bedroom apartment is $2,042
The average rent for a Philadelphia 3-bedroom apartment is $2,059
Interested in starting your Philadelphia apartment search, here’s how to find an apartment in Philadelphia.
Philadelphia Rent Trends: Rent Growth
Philadelphia rents have increased by 1.26% compared to last month, and are up by 2.83% compared to last year.
For a broader discussion of rent changes across the country, check out our National Rent Report. You can download the raw data containing rent estimates for hundreds of cities across the country.
Philadelphia Rent Trends: Inventory by Average Apartment Rent
19% of apartments in Philadelphia are studio apartments.
42% of apartments in Philadelphia are 1-bedroom apartments.
25% of apartments in Philadelphia are 2-bedroom apartments.
14% of apartments in Philadelphia are 3-bedroom apartments.
Average Rent in Philadelphia Neighborhoods
Has your ideal Philadelphia neighborhood already been picked out? Rent prices across neighborhoods can vary, so get familiar with the average rent prices across the various neighborhoods in Philadelphia.
The most expensive neighborhoods in Philadelphia are University City ($2,487), Center City West ($2,204), and Rittenhouse Square ($2,086).
The most affordable neighborhoods in Philadelphia are Washington Square West ($1,489), Brewerytown ($1,484), and Harrowgate ($1,246).
What Salary Do You Need to Live in Philadelphia?
Using the 30% rule, we can give a rough estimate of the salary needed to rent an apartment in Philadelphia. If these numbers look high, remember that a roommate or two can drastically cut down your monthly rent!
If you are renting an average-priced studio apartment in Philadelphia, your annual salary should be around $50,940 or higher.
If you are renting an average-priced 1-bedroom apartment in Philadelphia, your annual salary should be around $61,956 or higher.
If you are renting an average-priced 2-bedroom apartment in Philadelphia, your annual salary should be around $73,512 or higher.
If you are renting an average-priced 3-bedroom apartment in Philadelphia, your annual salary should be around $74,124 or higher.
If you’re considering renting in Philadelphia, be sure to learn more about the cost of living in Philadelphia.
Having trouble deciding how much rent you can afford? Try using a rent calculator.
Open houses are a very nice part of the house-hunting process, but it is important to focus on specific details when you go there. Usually, open houses are staged as a home decor event, which is the right thing to do when you want to sell a house. However, as a homebuyer, you should consider looking at some fundamental things, such as windows, storage spaces, electrical outlets, etc.
Here is a checklist of what you should inspect when you are inside the home you’re considering buying.
Windows: Confirm that they are opening and closing well. Another tip is to see if the window is facing the right direction to let the sunlight in, and make sure they don’t open right in front of your future neighbors, because no one wants to be stalked, right?
Storage Space: We all know when we are looking for a house, one of our main concerns is to have enough space in the closets. Therefore, checking out storage spaces is a smart idea, to see if they have adequate space and if they’re placed in a convenient location.
Electrical Outlets: When walking around the house, ensure it has plenty of electrical outlets in all rooms — appliances in the kitchen, hair styling tools in the bathrooms, charging stations for your devices, etc. These are necessary details in our daily life that should be remembered when you’re looking for a new house.
Under Sink Cabinets: Check under the sink cabinets of the kitchen and bathrooms to make sure there are no plumbing issues. If you are not capable of gauging that, hire a professional to help you.
Water Spouts: To check the water spouts, step outside of the house and confirm if everything looks ok. The runoff from the gutters has to be far from the house, so if it is too close, something is wrong.
Appliances: If the house comes with some appliances, like a refrigerator, oven, or stove, make sure they are working well. Test all of them before you make an offer, and if something is not functioning, you can use this to negotiate with the owner.
Basement: It is common in some areas for houses to have a basement, and it is crucial to have it well-insulated to not have mold and mildew problems. To know more about this, check out our post Why You Should Waterproof Your Basement.
This list contains some of the main things you should look at when you are at an open house, but it does not stop here. There are more items you should check off as well, but these are great ones to start with. Keep following our blog to learn more information about real estate advice and enjoy the house hunting!
Mortgage demand fell for the second week in a row, as low inventory and high home prices continue to weigh on the housing market.
Mortgage applications decreased 1.8% last week, according to the Mortgage Bankers Association’s seasonally adjusted index, falling to the lowest level since the beginning of 2020, before the coronavirus pandemic started to take a toll on the economy.
Both refinance and purchase applications took a hit, even as mortgage rates slipped.
Mortgage applications to refinance a home dropped 2% for the week and were 8% lower than a year ago. Refinance applications have trended lower than 2020 levels for the past four months, according to the MBA.
Home purchase applications dropped 1% for the week and came in 14% lower than a year ago.
“Swift home-price growth across much of the country, driven by insufficient housing supply, is weighing on the purchase market and is pushing average loan amounts higher,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Falling mortgage rates didn’t spur demand. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) dropped 5 basis points to 3.15, with points decreasing to 0.38 from 0.39 (including the origination fee) for loans with a 20% down payment.
Mortgage rates loosely follow the yield of the 10-year Treasury. Mortgage rates dipped despite good economic news, Kan added.
“Treasury yields have been volatile despite mostly positive economic news, including last week’s June jobs report, which showed ongoing improvements in the labor market. However, rates continued to move lower – especially late in the week,” he said. “The 30-year fixed rate was 11 basis points lower than the same week a year ago, but many borrowers previously refinanced at even lower rates.”
New York State Governor Andrew M Cuomo has launched a $9 million fund to support research into ways of capturing atmospheric carbon and turning it into useful products.
The Carbontech Entrepreneurial Fellowship Program will provide technical expertise for “carbon-to-value” technology that stores captured CO2 in physical objects.
The programme is part of the state’s aim of becoming a leading hub for carbontech businesses as well as supporting its goal of reducing its greenhouse gas emissions by 85 per cent by 2050.
“Revolutionizing the development of products made from carbon capture will create the landscape to achieve deep decarbonization in our fight against climate change,” Cuomo said.
“Attracting scientists with cutting-edge skills and knowledge to realize new products is essential to growing our green economy, and we are bringing their research out of the lab to pave the way for a more climate-resilient future to benefit all New Yorkers.”
Programme commercializes removal of CO2
The programme is part of a burgeoning “carbontech” sector that aims to commercialize the removal of atmospheric CO2, which is the main cause of climate change.
Players include Finnish company Solar Foods, which plans to make food from captured carbon, and Australian company Mineral Carbonation International, which turns CO2 into construction materials.
Other carbontech companies include Canadian company Carbicrete, which makes concrete from CO2, and Dutch brand Made of Air, which makes bioplastic from carbon-rich farm and forest waste.
Carbon capture key technology in the fight against climate change
The Carbontech Entrepreneurial Fellowship Program will be administered and funded by the New York State Energy Research and Development Authority (NYSERDA).
“By focusing on bringing together novel ideas with entrepreneurs, we are fostering a new pipeline of sustainable, emission-reducing products that will help New York shrink its carbon footprint and build healthier communities,” said NYSERDA President and CEO Doreen M Harris.
“Carbon-to-value” is a similar concept to carbon capture and utilization (CCU), which is emerging as one of the key planks in the fight against climate change. It involves capturing carbon from the atmosphere and turning it into useful objects that double as long-term stores for the element.
Atmospheric carbon can be captured using direct air capture machines, such as those developed by Climeworks. It can also be captured naturally in biomass including trees, hemp, bamboo and algae.
Earlier this year Elon Musk launched the $100 million XPrize Carbon Removal competition, which calls for new devices that sequester carbon dioxide.
“Decarbonization a top priority”
The New York State fellowship programme follows April’s launch of the $10 million Carbontech Development Initiative, a programme “to establish New York State as a world-class hub of carbon-to-value research, technology transfer and commercialization.”
“Capturing carbon and using it requires innovation, and this program will enable us to work with industry leaders who possess the necessary knowledge, technology, and vision,” said Cuomo in April.
“If we want to reach our ambitious goal of creating a greener, cleaner future for all New Yorkers, we need to make decarbonization a top priority. The Carbontech Development Initiative will help us to establish this innovative practice right here in New York, while simultaneously fueling economic growth and community engagement.”
New York City’s greenhouse gas emissions were visualized in a groundbreaking animation by graphics firm Real World Visuals.
Released in 2012, the computer-generated timelapse shows the city being buried under a mountain of bubbles representing the city’s 54 million tonnes of annual CO2 emissions.
The real estate market can make it easy or hard to sell a house. Many factors can contribute to that, like government incentives in the industry, the number of home buyers increasing or decreasing, and inventory available on the market. Additionally, how the economy is and how the purchasing power of the population is are other huge components in this equation. However, even though the market may be on your side, some people can not sell their house.
We’re going to find out which mistakes you’re making that are preventing you from selling your home. Don’t worry, this is more common than you think among sellers and agents.
1. Poor images
We’re in the digital era! So you have to put high-quality pictures of your house as a priority. If you don’t know how to take them, hire a professional photographer. It is nice to have some vídeos as well, and this way, it will be more fun for potential home buyers. For sure, this will make a huge difference in your sale.
The pictures should be clear, not dark. They should show the best angles of the house, and remember people like to see beautiful places. This connects us to another point — stage the house! You don’t want to take pictures of a dirty kitchen, a messy playroom, or pets on the couch. It’s important to know that people are different, but everybody loves a tidy place.
2. Withholding information
Sellers generally just write the address, value, and say that it is open for visits, but it’s not going to sell your house. What you should do is describe all parts of the house as much as possible — how many rooms, bathrooms, if it has a backyard, front yard, pool, how the kitchen is, etc. It’s crucial to tell potential buyers everything about the house to make them curious about the property.
Here is some information you could write about: What makes the house unique? What was your motivation when you bought the house? What is the architectural style? Mention every detail that makes the house amazing.
3. Hire a Broker/Agent
We all know sometimes we want to do it all by ourselves, but in some situations, hiring a professional is the best thing we can do when selling a house. An agent has the experience and the time to sell your house properly, which will make both the seller and buyer happy. The commissions that these agents get are worth it for you to get excellent service.
4. Restricting Access to the Property
If you want to sell the house, let people feel free to go there whenever they have time. It’s a big mistake to restrict hours, and do not forbid people from walking in some areas in the house, which can be perceived as rude or creepy.
5. Not Advertising
These days, everybody should know the power of advertising. If you’re putting your house out on the market, this is a step you must take if you want to succeed. Some of the options you can use for that are putting your house on various websites, such as classified ads, real estate, and social media.
6. Not Making Virtual Tours
This might not look so interesting at first, but since the COVID pandemic, virtual tours are more common than ever. People are first seeing homes online, and if they’re really interested, they will schedule a time to see the house. Making a nice video is fundamental to get more attention and offers from potential buyers.
Knowing about all these mistakes will make it is easier to avoid them. Now you can have a successful open house!
Tathiana Teixeira and Lilian Vianna-Benarroch opened Heritage Brazil this spring
Captivated by the contemporary designs and ancestral traditions of their native Brazil, Tathiana Teixeira and Lilian Vianna-Benarroch began drawing up plans for a showroom devoted to Brazilian craftsmanship in Southampton last fall. The glamorous result, which was created with the input of their husbands Alessandro and Michel, is Heritage Brazil. Situated in a former ice warehouse, the airy space has been attracting locals, nomadic urbanites, and members of the interior design community since its spring opening.
Teixeira, who also runs the tea business Plain-T, has resided in the Hamptons for nearly 15 years. Vianna-Benarroch, a fashion industry veteran, has a house in the area. Therefore, it felt fitting for the friends to unveil Heritage Brazil in an intimate setting on Long Island’s idyllic East End. “We think that the idea of luxury has been reshaped,” Vianna-Benarroch tells AD PRO. “There is a face and a hand behind each of our products, and this is what has become important to people.”
Heritage Brazil’s storytelling also illuminates sustainable practices and embraces design as a tool for social change. For starters, they are partnering with the Zagaia Foundation to raise awareness of the environmental and economic issues of the Amazon region. And throughout their own retail space, a small but mindfully curated assemblage of Brazilian-made goods reflects this same ethos. Consider the range of one-of-a-kind baskets by Sérgio J. Matos, developed with female artisans from indigenous communities along the Amazon River. Spun from piassava and buriti fibers, the baskets are soaked in mud for four days, which imbues them with an earthy, burnished hue. “Profits from the baskets then go straight back to these women in very poor parts of Brazil,” Teixeira points out.
Photo: DluxcreativePhoto: Dluxcreative
There are other intricate creations from Matos on display, too, including his Acaú Armchair, which resembles a fantastical underwater creature. Referencing the rare Elkhorn coral, it takes three months to produce just one such work from steel, twisted cotton, and resin wires. There are also the origami-like innovations of Flávio Franco Studio, such as the brushed aluminum Baralho chair, and the nature-inspired woodwork of Estúdio Paulo Alves.
“We have a huge network here and in New York City, but we are also reaching out to a lot of hotels and hospitality designers because so much of what we have is sculptural and would be great as statement pieces in lobbies,” says Teixeira.
Hand-loomed rugs from Trapos & Fiapos, a company launched by a doctor in northeast Brazil as a way of reviving both the local economy and the time-honored art of rug weaving, meld the likes of cotton and goat leather, while Felicia’s whimsical, tropical light fixtures are fashioned out of vegetable fibers including dendê, coconut palm, and ouricuri. Heritage Brazil’s own collection of subtly textured, eco-conscious leather salvaged from salmon and pirarucu skin maximizes a by-product of fish processing that would otherwise go to waste.
Looking ahead, hand-painted ceramics by Evelyn Tannus will join the Heritage Brazil lineup. Teixeira and Vianna-Benarroch are also pleased to have a presence at the Topping Rose House design show house in nearby Bridgehampton on July 28, when architect and designer Campion Platt will incorporate objects from Heritage Brazil into an installation. Multiple exhibitions in the Heritage Brazil showroom, featuring works like Marcia Grostein’s black-and-white photography, are also being organized to bring an additional cultural layer to the brand’s mission.
“We have these beautiful white walls,” says Vianna-Benarroch. “It’s another opportunity to showcase the diversity of Brazilian art and design.”
Going to open houses is a part of house hunting and a very exciting one. However, something that should be a fun part of your next step in life can be transformed into a nightmare if you don’t know how to act in these places.
Some of the common questions homebuyers ask are: Do I walk straight in? When do I ask questions? Is there a dress code? Can I bring the kids with me? We are going over these questions today, and we’re going to help you figure out how to deal with that, what you should do, and what you shouldn’t do.
What should a homebuyer do
1. Ask questions
That’s obvious advice, we know! But very frequently, when people are visiting houses, they get so excited with the houses that they forget to ask questions. It’s kind of funny but true! Remember, the agent is there to sell the house, so ask as many questions as possible. If you leave and still have questions, feel free to send them questions by email or phone.
2. Take pictures and videos
Even though nowadays the open listings have more images and videos, ask if you can take your own photos. It’s considered acceptable for would-be buyers to have some images from the house they are thinking about buying.
3. Check if something is broken
Check if everything is working in the house. Look around and see if there is anything broken, like doors, windows, open kitchen cupboards, and check the pressure in the faucets.
4. Make yourself at home
This is the house you’re envisioning to buy, so feeling comfortable is very important. Make yourself at home, imagine living in the place with your family, and feel free to sit down on the couch or at the counter in the kitchen. However, laying down on a bed is definitely off-limits.
5. No dress code
Our tip here is to dress in whatever you feel comfortable with. But remember, you’re going to see a house you want to buy, so it is nice to dress like someone who can afford a house, of course within your style.
What you shouldn’t do
1. Careful with kids
Usually, open houses are on weekends when families are relaxed and taking kids out for activities. There isn’t a rule, but it is polite to ask the agent if you can bring your kids for the open house, but only if you can watch them! It’s very rude to let kids mess around while people are looking at the house, remember that it’s not yours yet.
2. Criticizing the property loudly
It is very normal that the property won’t meet your expectations, but do not criticize it out loud. That is very impolite and makes everybody around feel uncomfortable. If the property is not what you want, check with the agent if they have another property, or you can use the faults to negotiate the price.
3. Don’t bring drink or food
It’s common courtesy not to bring drinks like coffee or eat snacks inside the house that could spill and get dirty. Some open houses have coffee breaks, but limit yourself to the area where there is food and drink.
4. Snooping around
It may seem unnecessary to say, but don’t snoop around people’s houses. You can look at the closets, and see how deep the bathroom cupboard is, but it’s unacceptable to snoop around people’s personal possessions.
To conclude, it is smart to bring your ID in case you need to register at the door of the open house. Ask as many questions as you need, and be nice, as the agents are representing the owner of the house. Always remember, being polite is the key to success!
While there has been uncertainty around the future of office real estate as a result of the pandemic, the asset class is performing better than some have expected. As the vaccine continues to become more widely distributed, utilization rates in office space continue to steadily increase. More than 95 percent of employers are anticipating a nearly full-return to office, which is significant considering occupancy was less than 50 percent in June of 2020. Life science and medical office space in particular, which provide the most stability during times of economic downturn, have been helping to bolster office performance. IIn this article we will cover:
The office industry and the case for investment in this asset class
The progression of modern office space
Life sciences and the impact Covid-19 has had on the industry
The evolution of the life science industry since the early 2000s
The future of office and the life science industries
COUNTERINTUITIVE: WHY YOU SHOULD INVEST IN OFFICE RIGHT NOW
During the pandemic, companies around the world had to switch from collaborative office environments to remote working. An estimated 62(1)percent of employed Americans worked at home during the crisis, compared to 31 percent prior to the pandemic. The resulting rise in U.S. office vacancy rates and the declining average gross asking rent caused concern for the future of office real estate.
According to CoStar, office-using employment fell 7.8 percent from February to April of 2020, but then increased by about 5.5 percent during the summer. The result was that office-using employment was only down about 2.8 percent from the February peak. Despite widespread fear of vacant offices, as of Q2 2021, the office vacancy rate exceeded 12%, up 2% year-over-year.
The reality is that while there has certainly been an impact on occupancy, the office sector is not only a safe bet, but continues to be a strong investment option. It is predicted that employees will be returning to office space earlier than anticipated. During his discussion with Willy Walker in Q4 2020, Owen Thomas, CEO and Director of Boston Properties, predicted that occupancy of his own buildings could be up to 20 percent by the end of the first quarter 2021, 50 percent by Labor Day, and up to 75 percent by the end of the third quarter.
Additionally, niche office sectors, such as life science and medical office which remain stable even during economic downturns, have bolstered the office market’s strength.
EVOLUTION OF OFFICE SPACE: NEW OPPORTUNITIES
Studies have shown that employees are eager to return to the office, but changes will need to be made to accommodate the evolving needs of tenants. According to a survey conducted by Deloitte, 68% of employers plan to implement some type of hybrid workplace model in 2021, while only 1% will remain fully virtual. With hybrid work schedules and increased flexibility, there will need to be more incentive for employees to make the trek into the office.
Additionally, the role of office space is shifting toward community and collaboration. Employees will re-enter the office as a means to build personal and professional relationships and connect with the culture, purpose, and mission that the company has to offer.
Investors and developers have an opportunity to reposition office space and gravitate toward a space that reflects the needs of the future. Physical and virtual experiences must be fully integrated into office space to ensure connectivity among all employees. Just as new technology must be integrated into the office space, companies need to invest in home tools and resources so that collaboration is seamless regardless of physical or virtual presence.
93% of people believe that a sense of belonging drives organizational performance (Deloitte 2020 Human Capital Trends). The future of office space will require a design that encourages reconnection, community, and inclusivity. The most successful office spaces will be ones that fully embrace the collaborative environment that corporate America is gravitating toward.
LIFE SCIENCE
COVID-19 ’S IMPACT ON THE LIFE SCIENCE INDUSTRY
Life Science companies are now at the forefront of public interest because of Covid-19 and the rush to develop a vaccine. As the life science industry continues to display remarkable resilience amid the economic downturn, investors and developers have a heightened interest in the space. As a result, institutional investment in the space has been growing at 15 percent per year, totaling more than $6 billion in 2020.
The need for more life science space also creates the need for new construction, as not all office buildings are capable of housing life science tenants due to the demanding lab requirements including high floor loads to handle equipment, proper ventilation, and safety infrastructure.
Buildings are constructed for a specific use, and traditional office structures have a predetermined capacity of weight the building can withstand. While traditional office spaces tend to use lighter materials and can therefore easily accommodate a variety of tenants, life science lab materials include heavy equipment, specific electrical wiring, complex systems, and more. If a building can structurally withstand the load bearing requirements, they can potentially redevelop space to fit a life science tenant’s needs. Still, significant capital expenditures would also need to be invested. If the life science company requires a more traditional or medical office space, such improvements are easier to accommodate.
Although it may seem as though investors and developers are now hopping on a hot trend, the life science industry has been experiencing exponential growth since the early 2000s.
LIFE SCIENCES SINCE THE EARLY 2000’S
An emphasis on individualized and preventative treatment has been a powerful driver of the life science industry for nearly two decades. The sector has also benefitted from technological advances in medicine, changes in healthcare delivery mechanisms, and an aging population. As this demand has grown, so has employment. Since the end of 2013, the number of life science jobs has increased by 70,000 jobs per year.
Life science tenants have proven to be resilient. Even during both economic downturns since 2000, life science industry employment has continued to increase. The powerful drivers of life science industry growth support lab space even during a recession. A high importance is being placed on life science employees, as their average salary has experienced more than 19 percent growth in the last five years. In this same time span, the total number of life science institutions has increased by more than 13 percent, further solidifying the industry’s value (1).
OUTLOOK ON LIFE SCIENCE
The world population continues to grow and age, and there is no shortage of diseases that plague the human population. As the need for treatment, cures, and innovations continues to grow, venture capital investment in the space will continue to increase as well. Investment from government grants and large pharmaceutical companies will also help stimulate the sector and stabilize it during turbulent cycles.
Since custom buildout for life science space requires significant capital, landlords can command higher rents compared to traditional office. As a result, there are high barriers to entry within the life science market. The recent modernization of zoning regulations throughout the U.S. have led to an increase in life science developments. From 2009 to the end of 2019, the amount of lab space in the United States grew from 17 million to 29 million square feet (1). To put that in perspective, the New York office market alone contains 1.4 million square feet.
There is a high demand from institutional capital looking to get into these high-demand markets. From a capital perspective, there will continue to be a massive flight of investment capital from real estate ownership to invest and own properties in the space.
Life science industry growth is aligned with global healthcare expenditures which are expected to rise at a rate of 5.4 percent annually, from $7.7 trillion in 2017 to an anticipated $10.1 trillion by 2022 (2). Additionally, revenue in the industry has been growing at a steady pace throughout the past decade.
Based on the trajectory that the life science industry has had since the early 2000s, along with the newfound recognition of its true necessity post Covid-19, industry growth is expected. Consult with our New York Capital Markets experts for your life science or office industry questions or transaction needs.
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