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JLL V.P. Discusses Role of Research in Commercial Real Estate at LVEDC Event

By Colin McEvoy on February 26, 2016

Lauren Gilchrist, the Vice President, Director of Research for Philadelphia at JLL, visited the Lehigh Valley this week to share her knowledge and expertise about the role of research in commercial real estate.

“I am actually amazed to see how many people came out on this February day to hear me talk about ‘data nerdery,’ as I call it,” she joked to the crowd of about roughly 80 people at the Sands Casino Resort Bethlehem on Feb. 22.

Gilchrist was the guest speaker for the Lehigh Valley Economic Development Corporation’s (LVEDC) first Brokers and Developers Council event of the year. These events offer an opportunity to learn about a timely topic and discuss issues affecting real estate brokers, site selectors, developers, bankers, and other professions..

Don Cunningham, LVEDC President and CEO, said his organization has become much more heavily involved in research, data, and understanding knowledge of the market. He specifically cited the work of LVEDC Research Specialist John Lamirand, as well as last year’s launch of the quarterly Lehigh Valley Commercial Real Estate Report.

“I always say among our staff that it’s hard to have a strategic plan and know where you want to go in the future if you don’t fully understand what’s going on in your backyard today,” Cunningham said.

One of the reasons this research is important, Gilchrist said, is that the world is getting smaller. Foreign investment in U.S. commercial real estate increased by 153.4 percent from 2014 to 2015, growing from $28.3 billion to a record-high $71.7 billion, with particularly notable gains in the industrial and hotels sector.

“What that’s doing is it’s effectively putting pressure on U.S. capitol,” she said. “Some of what we’re seeing in Philadelphia, for example, is investors getting squished out of New York and Washington D.C., and looking for places to place capital because pricing has gone up so much. That’s important for us to understand as we think about where the next opportunities are.”

Gilchrist said the essential functions of research in real estate are to collect and access the data, analyze it, tell the story, and “make it beautiful” and presentable for audiences. Access to information is abundantly available, she said, with such sources as CoStar, the U.S. Census Bureau, REIS, Zillow, Esri, VTS, and many others.

“Everyone has access to more information, but few know how to make sense of it,” she said. “Making data beautiful and making it accessible to executive audiences is a huge challenge for commercial real estate research and something that I think people who can do it will be more successful and be able to communicate better.”

Gilchrist said the Lehigh Valley has added 10,400 jobs since the pre-recession peak, growing from 277,958 jobs in 2007, to 288,360 in 2015, a 3.7 percent increase. That’s a better rate of growth than other regions in the state, she said, such as Philadelphia, which grew 2.2 percent in that time.

“The Lehigh Valley’s growth rate is higher than the city of Philadelphia, which is being heralded as a regional positive employment story. That is truly significant,” she said. “And when you look at the rest of the counties surrounding Philadelphia, no other suburban county, with the exception of Delaware County, has added jobs above its pre-recessionary level, so that really speaks to some of the momentum you’re seeing here.”

But the Lehigh Valley has not fully recovered from its previous pre-recessionary peak in the area of office-using jobs, Gilchrist said. The region has added nearly 5,000 office jobs since 2009, she said, but currently stands at 73,100, compared to 74,175 jobs in 2007.

Gilchrist also noted the regional population is expected to eclipse 850,000 people by 2020 with 15 percent growth in retirees (164,076) and 5 percent growth in millennials (100,015). This will create a demand for multifamily rental residential properties, she said.

Don Cunningham: International Investment in Lehigh Valley is Growing

This column, written by LVEDC President and CEO Don Cunningham, originally appeared in Lehigh Valley Business on October 19, 2015. (Click here to read Cunningham’s previous co[...]

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