Thoughts on Real Estate, Urban Planning and Big Data

Mt. Tom w/ Connecticut River, by Richard Nowak Walking, hiking and running are the few remaining safe, healthy and mentally recharging activities during this unusual period of pandemic. While many of Connecticut’s parks and beaches have been closed, hidden treasures of natural beauty are nearby, offering safe accessible escapes. Short adventures, lasting a few hours or a whole day, can be quickly reached from most parts of Connecticut. An outdoor trip permits responsible social distancing, and the opportunity to get much needed exercise and leave the confinement of the four walls of home. Castle Craig, Meriden, CT Connecticut has more than 130 State Parks and Forests with endless miles for a walk, run, or a quiet spot to just sit and relax. While the State Parks along the shoreline are familiar to many of us, most of Connecticut’s parks are located inland. The Connecticut State Park network was thoughtfully planned more than 100 years ago to preserve unique places of natura...

The Covid-19 pandemic will likely influence industrial real estate in at least three ways, 1. encouraging suppliers to increase inventories, 2. heighten the demand for buildings supporting e-commerce and 3. increasing demand for the incumbent last mile service providers. The initial impact of the Covid-19 was an unprecedented “Supply Shock”. The sudden close down of the Chinese economy severely disrupted the world's supply chain. Small and Medium sized Chinese companies producing parts for downstream factories, prevented the completion of finished goods both inside and outside of China. To safeguard against future disruptions, it is very likely that U.S. companies will increase inventory levels, creating a buffer for future supply side shocks. Normally carrying extra inventory would be a financial burden, but currently low interest rates will reduce these costs. Increased inventories will require well located warehouses, less than a four hour drive from major markets, with ple...

Real Estate investments can make or lose fortunes, with the difference between winning and losing measured in seemingly insignificant amounts: dollars per square foot or a few basis points. Unfortunately, Real Estate Investment decisions are most often made exclusively with information visible in the rearview mirror. Brokers deal everyday in this “inside” information driving value, closely tracking, and limiting access only to their best clients. But once a new deal in the market has been done, everyone knows and pricing adjusts rapidly. Economists refer to this pricing approach as a “Semi-Strong Form Efficient Market”, where values reflect all new publicly available information. True pricing opportunities are most often available only through privately held information. Surprisingly, Real Estate Investors and Occupiers usually have access to only very limited information: property replacement value, discounted cash flow, and recent sale prices. The data underlying the business d...

As the former head of Amazon's World Wide Real Estate Group, I am frequently asked, "where will HQ2 go?" While my role at Amazon did not involve office site selection (I worked on the buildings that get brown boxes to the right place) I did get to know the company well and the people making the site selection decision for HQ2. Why does Amazon need to move at all? What does Seattle lack? Seattle is not a big place,  at 3.8 million people, smaller than the Detroit metro area and slightly larger than Minneapolis-St. Paul. Its growth is constrained by water and mountains, which make for spectacular views, but limit roads, and housing development. Amazon has long outgrown Seattle, accelerated by the company's reluctance to have satellite offices.  Talent is limited in Seattle. The number of engineers graduating from Washington State is impressive at 1700 per year, but half the 3500 graduating near Philly and DC, and one third of the 5300 per year graduating near Ch...

Real Estate decisions will always be driven, in part, by a "Gut Feel". Too many factors inform a Commercial Real Estate decision, such as unseen history or a possible future, to rely on quantitative analysis alone. While often mocked, Feng Shui is a rule book of collective empirical observations, Bread Crumbs that have been laid out over time. Try doing a project in Asia without a Feng Shui master, you might not get far. Currently, there is no way to measure a real estate market's feel, other than spending time talking to everyone in your network. If you don't have a network, good luck, you will never find the Bread Crumb trail. Our RETech Start-Up, Mdory, quantifies how participants in a the real estate market are networked together, and builds a tool to monitor the human elements of the commercial real estate market, gaining insight into the buyers and sellers, and measures the connections between human behavior and outcomes. Mdory starts with Big Data, purely...