In the not so distant future, homes and retail centers will be undergoing significant changes. The pervasive influence of the internet will affect how people use their homes and how retailers will adapt to e-commerce. At the University of Miami’s Real Estate Impact Conference on February 9th, top executives from Starwood Capital Group, Whole Foods Market, Lennar Corporation, and Marriott International provided their insights on a number of issues.
Barry Sternlicht, chairman and CEO of both Starwood Capital Group and Starwood Property Trust had concerns that the economy is at risk of overheating. This will drive up interest rates creating a situation where interest rates will rise faster than wages thus affecting the borrowing power of buyers. A rapid increase in rates could cause a temporary blip in both the stock market and the real-estate market.
Marriott International President and CEO, Arne Sorenson, says “He feels positive about the economy for the short term.” He goes on to say “The tax cuts and the Trump administration’s reduction in regulation will help many businesses perform better, and they should hire more people, thus increasing the buyer pool.”
Juan Nunez, President of Whole Foods Florida, sees food markets being re-designed to adapt to online orders. This will reduce warehouse space in the stores while at the same time making the home the primary retail space. According to Nunez, “By 2024, about 40 percent of millennials will shop for groceries on line.”
According to Fred Roman, president of the east region for homebuilder Lennar Corporation, “Your home is going to become the main retail center for e-commerce.” Accordingly, in many of the new homes Lennar is building, Amazon’s Alexa is being integrated, allowing homeowners to order products by voice command. These changes, especially in high rise condominium buildings, will require larger drop off and pick up areas to accommodate the volume of goods being delivered. Also, by 2025 ride sharing will be the dominant form of transportation. This will lead to a decline in individual vehicle ownership.
Ready or not, change is coming!