Apr 06, 2017

VIDEO: Blackstone’s Jon Gray Discusses the Impact of Urbanization on Real Estate Investing

Blackstone’s Global Head of Real Estate Jon Gray recently sat down to discuss how the trend toward re-urbanization in the United States and globally is impacting real estate investing today.


We think real estate investors, sometimes are too grounded in the past, but if you step back, dig into the data, see the trends that are actually emerging, it allows you to have a little bit of a better perspective - and in real estate today, the action is all in the big cities.


There's a powerful trend of re-urbanization that's happening in the U.S. and around the world. Young people are choosing cities where innovation is taking place, and this is happening at an accelerating rate. 


If you look at cities like New York, Boston, Seattle, they've had more population growth in the last five years than they did in the previous 50 years.


If you go to Stockholm, if you go to Amsterdam, Berlin, Munich, London, the same phenomenon is happening.


Now, the population of Brooklyn is only up a little less than 10 percent over the last ten years. But when you look underneath a little bit, what you see is the number of college-educated people living in Brooklyn is up over 50 percent. They're flocking to Brooklyn. They are changing these neighborhoods.


And today, talent is so important in this globalized, technology-driven world we live in.  You now see companies like McDonald's moving from Oakbrook, the suburbs downtown. 


General Electric, they choose to move from leafy suburban Connecticut to the seaport in Boston. 10, 15 years ago, there was very little in the seaport, period.


This trend seems to be accelerating, and again, that's driving up demand for space, living space, working space, retail space. It's hard to build in these areas, so values go up. And as real estate investors, we want to see where the puck is going, we want to see what's happening in these trends, and deploy capital ahead of it, and if we do that, we think we can generate attractive returns for our investors.


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