We have all become digital nomads. What that means for real estate (and real estate values) is still murky, but some trends are coming into clearer focus.
Last month, Airbnb CEO Brian Chesky announced that he would be living off his platform, hopping to a different town or city every couple of weeks. He said he wanted to live the experience that so many Airbnb users, untethered from the office, were having. (At The Real Deal, we’ve had reporters logging in from South Carolina to Dubai every day on Zoom, so this resonates.)
“The pandemic has created the biggest change to travel since the advent of commercial flying,” Chesky tweeted, citing a “decentralization” of living. “For the first time, millions of people can now live anywhere.”
The central aphorism of real estate, “location, location, location,” seems to have been turned on its side. To paraphrase Gertrude Stein (who was not talking about real estate), “There is less there there.”
Of course, as the pandemic has shown us, people are more tethered to the home (even if it is multiple homes or changing homes), and home values keep rising as a result (see our dispatches from South Florida and San Francisco).
Office space is certainly having an existential reckoning. At The Real Deal HQ, we are building out a video studio and looking at using our space for more networking events, to complement whatever work setup we have in the future. It’s the same existential crisis that retail faced several years ago, when people asked why you need stores IRL when you can just go to Amazon.
All of which brings us to our cover story this month.
As physical locations are less of an anchor, the connective tissue of the internet gains more importance. Cryptocurrency is part of this new digital infrastructure — stored on the blockchain, decentralized and transcending any physical or national borders. And the massive wealth generated in this new crypto economy is beginning to shape the brick-and-mortar luxury market. As reporter Trevor Bach writes, cryptonaires are forking over big money — sometimes $100 million or more — for trophy properties from Los Angeles to Miami and in between.
But not everything in the tech space is rosy. Many proptech companies went public amid hype during the last 18 months via mergers with special purpose acquisition companies, or SPACs. But most have been duds, their stock prices today in the gutter, as reporter T.P. Yeatts writes.
Industrial real estate has gone from a sleepy asset class to a booming sector thanks to e-commerce and the supply chain it entails, but its biggest players remain under the radar. We profile Andrew Chung of Innovo Property Group, the face of warehousing in New York, “a sort of real estate soothsayer who saw a big shift in the industry before anyone else and got in on the ground floor,” reporter Rich Bockmann writes.
Meanwhile, developers are scrambling to find more land to build industrial projects on — even going as far as tearing down 100 homes in suburban Chicago to make way for a giant warehouse project.
As people spread out, it’s more important to understand what’s happening in all markets, and to that end, we have our 17th annual Data Book included with this issue. It’s a jam-packed 164 pages of all the real estate stats and facts you could need and covers all the major markets that The Real Deal reports on across the country.
And for those who are still trying to wrap their head around what blockchain, crypto, NFTs and the metaverse have to do with real estate, you are invited to Future City, the annual three-day event TRD holds in the Bahamas, from March 20-22. We explore the intersection of technology and real estate amid the dramatic changes to how we work and live. See our events page for more info.
Enjoy the issue!