To get an outside perspective on the markets within which we invest and to expand our relationships with market experts, we at Boyd Watterson often attend industry conferences. Recently, some of our real estate division employees attended an Urban Land Institute-sponsored event on small project development. The conference was held in Indianapolis, Indiana and featured several developers, government officials, and community development organizations from the greater Indianapolis area. There were several key takeaways from the conference that are applicable to the overall real estate market, not just Indianapolis.
First, the competition for labor talent is intense across the country. We heard from multiple sources that the need to recruit high-paying jobs to the area has led to the development and redevelopment of existing office and residential downtown space into more modern and amenity-focused properties that companies and employees are looking for when deciding where to locate. Second, development is continuing to take place closer to areas with easily accessible public transit and walkable space as this has also become something that companies and residents are placing a high emphasis on when deciding where to locate (see planned transit expansion map below).
During the conference, our attendees had the opportunity to take a bicycle tour of the Cultural Trail, a biking/walking path that was built out of existing roadways around downtown and nearby areas (see orange path in map below). Representatives from the entity that built and maintain the Cultural Trail mentioned that property values within 500 feet of the pathway have increased nearly 150% from 2008-2014. Relating to the trail, public-private partnerships are increasingly centered around the government making enhancements to a location which then increases the development potential of the space. For example, a public space like a plaza or park is created, with roadways and amenities, then office properties or retail are developed around them. Governments can recoup the costs of these projects through the tax revenue received from property, income and sales taxes collected from the commercial development that would not exist had the site remained empty.
The most important takeaway, and the reason we continue to participate in these events, is that in a tangible asset class like real estate, being onsite is an invaluable way to get an accurate feel for what is happening in a market. We believe relevant factors become much easier to understand and opportunities become more identifiable when given the ability to tour an area in person. Additionally, creating connections with people working directly in the market is, in our view, the best way to obtain access to the types of transactions in which we want to participate, and is a core tenant of our philosophy.
Check back in to learn more about other conferences we attend and markets we discover.
Rank Dawson, CFA
Vice President, Investment Strategy
Boyd Watterson Asset Management, LLC
The views expressed herein are presented for informational purposes only and are not intended as a recommendation to invest in any particular asset class or security or as a promise of future performance. The information, opinions, and views contained herein are current only as of the date hereof and are subject to change at any time without prior notice.