Uncategorized – Real Estate Matters
Browsing Category



Where Have All The Renters Gone?

Is there a change coming in attitudes about renting vs. home ownership?

The following is a re-post by Daniel McCue at the Harvard Joint Center for Housing Studies on Dec 14, 2018

After more than a decade of strong growth, the number of renter households in the United States fell in 2017, according to the three government surveys that track household formation. Specifically, the latest 1-Year American Community Survey (ACS) estimates from the Census Bureau indicate that the number of renter households dropped by 459,000 from 2016 to 2017 (from 43.84 million to 43.38 million households). Somewhat similarly, the Housing Vacancy Survey (HVS) showed a decline of 129,000 in that time while the biannual American Household Survey (AHS) found that the number of renter households declined by 111,000 between 2015 and 2017.

What is causing this decline and what might it mean for markets?

Is it due to a drop in new households being formed by young adults, who are most likely to become renters? If so, this could signal that the demand for rental housing is falling and/or that rental affordability is a growing barrier to establishing a household. Alternatively, could the decline in renter households be due to an increase in first-time home buying? If so, that might be a sign that many young renters whose homeownership aspirations have been delayed are now finding it possible to buy rather than to rent, which might also reduce the upward pressure on rents. Or is the decline due to something else altogether, such as the aging of the population, which could result in rising numbers of renter households lost each year due to mortality or moves into nursing homes.

The AHS, which asks people who moved since the last survey whether they owned or rented their previous home, can help answer these questions. It suggests the major factor behind the loss of renter households is an increase in the number of renters switching to homeownership. Notably, compared to the 2015 AHS, the 2017 survey shows a 20 percent increase in the number of renters who moved into homeownership and a 15 percent decrease in the number of owners who moved into rentals. As a result, among existing households, there was a net shift of 1.7 million households from renting to owning, a more than three-fold increase from 2015, when, on net, only 0.7 million existing households moved from renting to owning

In addition, AHS also showed a slight decline in the number of newly formed renter households in 2017 relative to 2015 and a modest increase in the number of newly formed households that went directly to homeownership. Indeed, while the vast majority of newly formed households are renters, and the total number of moves among newly formed households held at just over 5 million in 2017, the number of those newly formed households that were homeowners grew by about 16 percent (from 900,000 in 2015 to 1.0 million in 2017), while the number that were renters dropped by six percent (from 4.3 to 4.0 million).

ACS data also suggest that increased transitions to homeownership among renters age 30 and over —rather than a decline in new renter household formations —  is the primary cause of the decline in renter households. This data show that losses of renter households among households age 30 and over have increased in the past 3-5 years, while renter growth among younger cohorts held consistent.  Additionally, on net, the number of homeownership households has increased for cohorts of those age 25 and over each year since 2013. (This, in turn, helped increase homeownership rates for the 25-34 and 35-44 year old age groups as documented in our 2018 State of the Nation’s Housing report.)  The data also show that net losses of renter households among renters age 75 and over have remained stable, suggesting that an increased rate of losses due to the mortality of a growing aging population is causing the recent drop in renter households.

In sum, the decline in the number of renter households as measured in the three major Census Bureau household surveys over the past year does not appear to be due to a drop in new demand, as the number of net new renter household formations among the youngest households remains level. Instead, it appears to be driven by a surge in the number of renter households headed by people in their 30s and 40s transitioning to homeownership, a transition that has been less common since the mid-2000s.

Given that the renter households that are transitioning to homeownership have above-average incomes, this dynamic seems likely to contribute to a softening in high-end rental markets (which was also documented in this year’s State of the Nation’s Housing report. Moreover, it could have the potential to reduce pressures that drive increases in rents, which have continued to rise, albeit at somewhat slower rates than in previous years. And if rent increases slow (and incomes continue to rise) there may also be more units affordable for the many younger, less affluent people who are forming (or want to form) renter households in the next few years.

To see the entire report: http://www.jchs.harvard.edu/blog/where-have-all-the-renters-gone/



Economics, Housing, Housing Trends, Minneapolis / St. Paul Housing, Real Estate Trends, Residential Real Estate, Residential Real Estate Index, Twin Cities Real Estate, Uncategorized

Sight-Unseen Home Buying: Trend or Consequence

Twenty years ago, virtual tours and 3D graphics were mainly science fiction in movies like The Fifth Element, and a “sight-unseen” purchase literally meant a buyer had no experience of the property other than static photographs. Buyers were in essence blindfolded. Today, 3D and virtual technologies have become a reality. They are able to bring a property experience to the “sight-unseen” purchase. Local Minneapolis real estate broker Aleksa Montpetit of Downtown Resource Group noted this ingress of technology into the real estate industry, and how it has given realtors a new tool to present properties. Montpetit, who has personally sold 3 properties sight-unseen in the last year, said the Minneapolis market has recently seen buyers more willing to at least offer sight-unseen.

An article posted in the Wall Street Journal by Katy McLaughlin cites increases in sight-unseen purchases are nationally becoming more common. The annual Redfin survey showed 33 percent of those surveyed said they had made at least an offer on a house “sight-unseen” in the last year. However, this survey did not include the Minneapolis market.

Both Scott Parkin of Verve realty and Scott Stabeck of Sotheby International agreed with Montpetit that potential buyers are more willing to make offers “sight-unseen,” and they added Continue Reading


Iconic Rotterdam Project Uniquely Combines Open Air Market and Housing

October saw the opening of an innovative development in Rotterdam, Netherlands which features a combination of uses found nowhere else in the world. The innovative design includes the Netherlands’ first indoor covered market hall, which is enveloped by a 230-unit apartment building. In addition to the covered market with 100 vendor stalls, the property contains space for restaurants, a supermarket and underground parking.

Markthal in Rotterdam

It was designed by Dutch firm MVRDV, which was among the wave of “Superdutch” architects that emerged in the Netherlands in the 1990s. Despite being enclosed, the market space feels open-aired due to the vast space enclosed by the 11-story building. Perhaps the most striking feature of the market is a vast mural along the market’s ceiling which is intended to help transform the cavity into a welcoming public space.

A view of the interior of the market hall, which is overlooked by windows of the apartment units. (Source: The Guardian)

The horse shoe shaped arch of the building consists of housing from the third to the eleventh floor, in total 102 apartments and 126 condo units. Each unit has an Continue Reading

Government Policy, Residential Real Estate, Uncategorized

A Look at Property Taxes Nationwide

With income tax returns completed and filed (hopefully on time), the next big tax payment many people across the country will make will be property taxes. According to the findings of a new residential property tax study from the Tax Policy Center, in 60% of U.S. counties the reported property tax burdens average between $500 and $1,500 a year. But that might only cover a month’s worth of taxes on a home in the most highly taxed counties.

Property Taxes by County

Average Residential Property Taxes by County (source: CNN)

Some of the highest average property tax burdens can be found in the New York. Westchester County, N.Y. ($9,647 a year) and Nassau County, N.Y., ($9,080) (both New York City suburbs) had the highest average residential property tax burdens. Many other counties in New York also have high property taxes, a result of duplicative local government units (one county alone had 941 separate governments, including towns and villages as well as police, fire, and school districts) and an education funding system that relies predominantly on property taxes.

On the other end of the spectrum, 24 counties nationwide had annual property taxes below Continue Reading

Commercial Real Estate, Development, Economics, Industry News, Medical Office, Office Real Estate, Real Estate Trends, Uncategorized

Medical Offices Now Work as Timeshares

 The following article was reposted from Globe Street.com

By Carrie Rossenfeld | Orange County

Dopp-Grech: “The next step is for independent operators to offer this format without a specific hospital affiliation.”

IRVINE, CA—Like executive suites in the office market, shared medical space to accommodate multiple practices is being explored by medical landlords, Sonya Dopp-Grech, SVP/director of healthcare services for NAI Capital, tells GlobeSt.com exclusively. The concept allows for physician mobility and maximized use of the space.

“The healthcare industry is showing movement toward time-share concepts, allowing physicians to serve different geographical areas without the need to open additional offices,” says Dopp-Grech. “The concept has already been widely used by hospital groups to allow various specialists to reach out into the communities they serve. The next step is for independent operators to offer this format without a specific hospital affiliation.”

Medical landlords are beginning to explore this option with vacant or underperforming space in their buildings. The caveat is finding a responsible and reputable source to manage this type of space, which would look like a regular medical office with a common waiting area, receptionist and exam and treatment rooms. They may also contain a shared lab, equipment and other amenities.

“It’s like Regus does in the general-office market,” says Dopp-Grech. “Doctors go in and out and don’t need private offices so much anymore. They have their laptops and they see patients, but this way they can see patients at all ends of the county and don’t need to find a long-term lease in each location. It makes great sense, since the way of the future is consolidations.”

The concept makes sense for smaller independent practices or those who want to combine with a larger group. From the landlord perspective, if one is faced with vacant space, this presents another way to fill it with medical tenants.

As GlobeSt.com reported in January, consolidation is the keyword for medical practices today as they search for operating efficiencies. Since healthcare is moving away from the hospital setting into more of a retail environment, this consolidation presents challenges for larger medical practices seeking space to accommodate their needs.

One solution has been for larger groups to lease retail space that formerly held sizable stores such as Barnes & Noble, Dopp-Grech told GlobeSt.com. As GlobeSt.com reported earlier, as healthcare moves toward retail settings, many retail landlords are finding themselves for the first time involved in build-outs and tenant improvements for medical practices. While this trend is welcome among most landlords, they may not be prepared for the high cost of some of these improvements, according to Dopp-Grech.

“Consolidation is occurring because health systems want to make everything efficient for the groups,” says Dopp-Grech. “Smaller groups won’t be able to survive with malpractice insurance [and other costs]. So they’re consolidating and going into larger retail buildings, such as a Barnes & Noble that got vacated.”

 Follow this link to Globe Street: http://www.globest.com/
 About Our Columnist
Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the West Coast region of GlobeSt.com and Real Estate Forum. She was a trade-magazine and newsletter editor in New York City for 11 years before moving to Southern California in 1997 to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics ranging from intellectual-property licensing and giftware to commercial real estate. She recently edited a book about profiting from distressed real estate in a down market and has ghostwritten a book about starting a home-based business.Email
Economics, Home Prices, Housing, Housing Trends, Minneapolis / St. Paul Housing, Residential Real Estate, Residential Real Estate Index, Twin Cities Real Estate, Uncategorized

House Prices and Lagged Data

mortgagesThe following is a posting from one of my favorite blogs, the Calculated Risk Blog.                -Herb Tousley

Posted: 27 Mar 2014 11:55 AM PDT

Two years ago I wrote a post titled House Prices and Lagged Data.  In early 2012, I had just called the bottom for house prices (see: The Housing Bottom is Here), and in the “lagged data” post I was pointing out that the Case-Shiller house price index has a serious data lag – and that we had to wait several months to see if prices had actually bottomed (the call was correct).

Now I’m looking for price increases to slow, and once again we have to remember that the Case-Shiller data has a serious lag.  (Note: the following is updated from the post two years ago). All data is lagged, but some data is lagged more than others. In times of economic stress, I tend to watch the high frequency data closely: initial weekly unemployment claims, monthly manufacturing surveys, and consumer sentiment. The “high frequency” data is lagged, but the lag is usually just a week or two.

Most of the time I focus on the monthly employment report, quarterly GDP, housing starts, new home sales and retail sales. The lag for most of this data is several weeks. As an example, the BLS reference period contains the 12th of the month, so the report is lagged a few weeks by the time it is released. The housing starts and new home sales data released recently were for February, so the lag is also a few weeks after the end of the month. The advance estimate of quarterly GDP is released several weeks after the end of the quarter.

But sometimes the lag can be much longer.  Two days ago, the January Case-Shiller house price index was released. This is actually a three month average for house sales closed in November, December and January. But remember that the purchase agreement for a house that closed in November was probably signed in September or early October. So some portion of the Case-Shiller index will be for contract prices 6 to 7 months ago!

Other house price indexes have less of a lag. CoreLogic uses a weighted 3 month average with the most recent month weighted the most, the Black Knight house price index is for just one month (not an average).

But, if price increases have slowed – as Jed Kolko argues using asking prices – then the key point is that the Case-Shiller index will not show the slowdown for some time.   Just something to remember …

Follow this link to the Calculated Risk Blog: http://www.calculatedriskblog.com/


Commercial Real Estate, Development, Economics, Housing, Housing Trends, Industry News, Multifamily, Real Estate Trends, Residential Real Estate, Uncategorized

Developer Makes a Bet on Prairie-Home Boom

Related Paid $300 Million for Apartments in Texas, North Dakota

 This article was reposted from the Wall Street Journal on March 18, 2014. It was written by Craig Karmin and Eliot Brown

A two-bedroom recreational vehicle at North Dakota Housing’s RV Park in Watford City rents for $2,350 a month.  -North Dakota Housing

Related Cos., the developer best known for luxury condominiums and big commercial projects, is turning its sights to low-slung apartments on the North Dakota and Texas prairie, where a shortage of housing tied to the energy boom is allowing landlords to command some of the highest rents in the country.

The company, run by Miami Dolphins owner Stephen Ross, last week paid around $300 million for 20 apartment complexes with 3,000 units in Midland and Odessa, Texas, according to people familiar with the transaction. It also is in advanced talks for a deal on an existing project in North Dakota’s Bakken region, and plans to raise up to $300 million for a fund focused on shale-rich communities from desert areas near the Mexican border to the Appalachian basin in the East, the people said.

Mr. Ross is following a small band of investors, including private-equity giant KKR & Co. and real-estate firm Westport Capital Partners, into the residential and commercial markets of new and resurgent energy towns a world away from the cities and suburbs where they usually build or buy. They are drawn by rents that would seem more reasonable in Midtown Manhattan and Silicon Valley, the result of almost nonexistent unemployment and low supply.

A two-bedroom apartment in Williston, N.D., for example, can go for $3,000 a month, or more. In nearby Watford City, North Dakota Housing LLC rents a two-bedroom trailer for $2,350 a month. The same rent could fetch a spacious luxury apartment in cities like Las Vegas or Phoenix, or a studio in new towers in New York.

“We think it’s a unique opportunity,” says Justin Metz, managing principal of Related’s fund-management group.

The boomtowns in Texas have been around since oil-drilling rushes of previous decades, but those in North Dakota began sprouting about five years ago as energy companies started to pull oil and natural gas from shale-rock formations through a process known as fracking. Their populations have skyrocketed, overwhelming the existing housing stock. Many workers continue to be housed in barrack-like “man-camps.” While riding a boom is risky, investors point out that they are getting compensated with high yields. For example, Related is expecting the initial annual income from the apartment portfolio it purchased last week will be more than 10% of the purchase price, according to people familiar with the matter.

By comparison, investors on average are getting a yield of about 6% on rental-apartment acquisitions and that figure can dip below 4% in major cities like New York, according to data firm Real Capital Analytics. “Typically, pricing gets ahead of real-estate fundamentals,” says Mr. Metz of Related, referring to high employment and rapid economic growth in the oil and gas-rich regions. “Here you have strong real estate fundamentals and pricing hasn’t caught up with it yet.”

Still, some analysts are warning that job growth eventually will level off and begin to fall after the initial labor-intensive effort of drilling wells is complete. Employment in the rapidly growing petroleum sector of the North Dakota Williston Basin, for instance, is projected to rise from 14,153 in 2009 to more than 53,000 in 2020, before falling to 40,000 by 2030, according to North Dakota State University’s Department of Agribusiness and Applied Economics.

Meanwhile, developers already are adding to supply, causing Moody’s Investors Service last month to issue a report warning that rents in North Dakota boomtowns are “well above sustainable” levels. “It really intrinsically doesn’t make sense for a town with no physical barriers to entry to command the same rents as New York or San Francisco,” says Tad Philipp, director of commercial real-estate research at Moody’s Investors Service.

Not all bets have been winners. For example, Flathead Glacier Group LLC, a Bozeman, Mont., real-estate company, defaulted on a $24 million loan backed by 134 rental apartments in Williston and Watford City just four months after it was sold into a mortgage bond, according to Trepp LLC. Last week, Trepp reported the loan went to 90 days delinquent from 60 days. Inquiries to Flathead were directed to a firm run by loan sponsor John Dunlap, who didn’t respond. But a spokeswoman for Halliburton Co. confirmed that it terminated its lease for 40 units owned by Flathead in August when Halliburton completed construction of housing for its workers in Williston.

Still, many investors and planners believe it could be years more before supply catches up with demand, pushing rents down. For some of the early real-estate investors in the latest boom, cash is pouring in as rents rise. Average rents in Williston have risen from about $1,000 a month in 2009 to nearly $2,500 at the end of 2012, the latest available data, according to the Williston Regional Economic Development Corp.

KKR was one of the first big-name investors to show up, announcing a 164-acre master-planned community in Williston in 2012. The private-equity firm expects to complete this summer eight rental apartment buildings on the site. The apartments have been coming to market gradually and KKR officials say they are leasing 20 to 25 a week. KKR and its partners are spending about $150 million to build the apartments, and to prepare vacant lots that they are selling separately to home builders.

Follow this link to the article: http://online.wsj.com/news/articles/SB10001424052702303287804579447463140236306?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303287804579447463140236306.html&fpid=2,7,121,122,201,401,641,1009

Write to Craig Karmin at craig.karmin@wsj.com and Eliot Brown at eliot.brown@wsj.com


Housing, Real Estate Programs, Residential Real Estate, Uncategorized, UST Program News, UST Real Estate in the News

Real Life Multimillion Dollar Real Estate Lesson for UST Students

By Kate Renner, published 2/11/2014, KSTP.com

It’s a real life real estate lesson. Some University of St. Thomas real estate students are taking part in a multimillion dollar home build, and soon a home sale.

The house, which is built on the last empty lakeshore lot in Edina is weeks away from completion. When the house is completed, it will be on the Parade of Homes tour starting March 1, and after that it’ll be put on the market.

The proceeds could raise the University of St. Thomas real estate program hundreds of thousands of dollars.
The cabinets that St. Thomas Senior Teresa Lingg helped pick out were installed in the kitchen Tuesday. Lingg was one of two student interns who worked with professional builders and contractors, who donated much of their time and materials to build the Edina house.

JMS Custom Homes is building the house as close to “at cost” as possible, for roughly $1.5 million, but the asking price will be much higher.

Continuing reading on KSTP. com


Motorola Mobility to Abandon Suburban Headquarters for Urban Office

When Motorola Mobility lined up a Silicon Valley candidate a few months ago for a VP-level role, the phone maker was hopeful he’d accept. After all, the company offered the chance to develop products at a subsidiary of Google Inc.

The engineer declined. His reason: the prospect of relocating to Libertyville, Ill., about 35 miles from downtown Chicago, said Scott Sullivan, Motorola’s head of human resources.

Mr. Sullivan expects recruiting to get a lot easier next February when the company moves into a new space in the storied Merchandise Mart building in downtown Chicago.

Motorola will join United Continental Holdings Inc., UAL -0.14% Hillshire Brands Co. HSH +0.40% —the successor to Sara Lee Corp.— and other corporate giants abandoning vast suburban campuses for urban offices nearer to the young, educated and hyper-connected workers who will lead their businesses into the digital age. Archer Daniels Midland Co. ADM +1.13% recently said it would move its headquarters from Decatur, Ill., and in the Bay Area, startups like Pinterest Inc. are departing Silicon Valley for San Francisco.

After decades of big businesses leaving the city for the suburbs, U.S. firms have begun a new era of corporate urbanism. Nearly 200 Fortune 500 companies are currently headquartered in the top 50 cities. Many others are staying put in the suburbs but opening high-profile satellite offices in nearby cities, sometimes aided by tax breaks and a recession that tempered downtown rents. And upstart companies are following suit, according to urban planners. The bottom line: companies are under pressure to establish an urban presence that projects an image of dynamism and innovation.

“The showcase headquarters of the past, the beautiful suburban campuses—that’s a very obsolete model now,” said Patrick Phillips, CEO of the Urban Land Institute, a land-use think tank.

Nationwide, commercial vacancy rates in central business districts have gone down faster than those in suburbs since the real-estate market began to recover in 2011, with 13.9% of urban space empty in the third quarter of 2013 versus 18.5% in the suburbs, according to research firm Reis Inc. At the end of 2010, the figures were 14.8% and 19.1%, respectively.

“There’s increasing evidence that this represents a broad trend among large and middle-size companies,” said Enrico Moretti, an economist at the University of California, Berkeley, and author of “The New Geography of Jobs.”

Cheap real estate, tax incentives, and easy automobile access once lured companies to the suburbs, but companies now want urban amenities, proximity to public transit and sense of community—the same qualities young workers prize when deciding where to live and work, said Robert Lang, an urban planning expert and director of Brookings Mountain West.

And highly educated workers are clustering in a small number of cities. In 2010, more than 43% of Americans with bachelor’s degrees chose to live in 20 metropolitan areas, primarily tech hubs such as Seattle, San Francisco and Raleigh, N.C., according to research from the Brookings Institution. And as younger graduates marry and start families later than previous generations—often with both spouses pursuing careers—they’re delaying moves to the suburbs, sometimes indefinitely.

For longtime employees, however, corporate moves to the city mean longer commutes and disrupted schedules and family life. And the corporate quest for youth and innovation can leave some workers feeling slightly unwelcome.

“We joked about the older suburbanites being excluded from the new [business] model,” said Jon Scherf, age 42, a marketing professional who left Hillshire shortly before its December 2012 move to downtown Chicago. “They would’ve been happy to have me but they’re also happy to bring in new blood.”

Companies say some attrition is normal. Motorola is offering full relocation packages for employees who choose to sell their suburban homes and move closer to the new office. Still, management expects 2% of its staff to depart and about 75% to stay after the relocation. The remainder, said Mr. Sullivan, will likely be “on the fence.”

The shift to urban headquarters favors cities such as Chicago, San Francisco and Boston, destinations of choice for recent college graduates, while aging cities like Cleveland and Detroit struggle with corporate flight and economic decline.

Even when headquarters stay put, more companies are opening or expanding urban satellite offices, especially for technology and research staff working on product development and innovation, according to Mr. Moretti.

Silicon Valley giant Yahoo Inc. YHOO -0.03% signed a big lease this year to expand its San Francisco offices so it can recruit top engineers unwilling to make the long commute on Highway 101. And Coca-Cola Co. KO +1.58% in June said it would open a 2,000-person information-technology office near its headquarters in downtown Atlanta, relocating some tech staff that had been based in the suburbs.

Overall demand for commercial real estate in the suburbs is strong in metro areas like Sacramento and Dallas, and in regions rebounding from the worst of the housing collapse, said Walter Page, director of research at real-estate data firm CoStar. However, almost no large firms have left cities for the suburbs recently, CoStar has found.

Enlarge Image

United Continental moved operations staff from Elk Grove Village, Ill., to the Willis Tower, shown, in Chicago. United

As United Airlines planned its 2010 merger with Continental Airlines, the company chose a neutral space for the two cultures to meld. That meant leaving the “bubble” of its immense campus in Elk Grove Village, a suburb about 20 miles from Chicago, said Kate Gebo, vice president of corporate real estate.

The carrier shifted a small group of employees to Chicago in 2007 and in 2009 announced that it would move all corporate operations downtown. It was an opportune moment; the real-estate market was sagging and landlords were slashing rents, and the city offered the company incentives worth up to $35 million over 10 years. About 4,600 United employees now work in 16 floors of the Willis Tower, formerly known as the Sears Tower.

The new downtown offices—decorated with murals and lights that mimic the shape of an airplanewing—have proved a magnet for M.B.A.s from top-tier schools as well as new staffers in digital advertising and social media. In the last two years, more than a third of all hires have been under the age of 30, said a spokeswoman. Before that, the figure was closer to 25%.

United has also revived its college internship program, which had been largely dormant for years because the commute from area colleges to Elk Grove Village was too arduous for those without a car.

The airline declined to detail the cost of its relocation or its current real-estate expenses, but Ms. Gebo said the alternative was an extensive upgrade of its old facility.

For Hillshire, which changed its name from Sara Lee after spinning off its European coffee and tea business in 2012, the move downtown was part of a total reorganization that included emulating the culture of a startup, and hiring a workforce to match.

The maker of Jimmy Dean sausage and Ball Park franks now calls itself an “innovative meat-centric company” and a “$4 billion startup.” The slimmed-down Hillshire—which now employs around 550 people at headquarters, down from 1,100 before the split—vacated its suburban campus in December 2012 for Chicago’s West Loop.

In the city, Hillshire is finding “the type of employees we wanted—externally focused and agile” with a ” ‘refuse to lose’ attitude,” said Mary Oleksiuk, Hillshire’s head of HR.

One of them, Ryan Rouse, age 33, directs the company’s innovation group. He owns a home in the West Loop and joined Hillshire in June from a marketing role at Newell Rubbermaid in Oak Brook, Ill. Now, instead of a car commute that could stretch to almost two hours, he’s got a 15-minute walk or a five-minute bike ride to the office. Dining options near the office have been a plus, he said, adding that “access to really wonderful food experiences” helps him think more creatively about possible Hillshire products.

For longtime employees, it has been a more complicated switch. Melissa Napier, treasurer and senior VP of investor relations at Hillshire, bought a house in Downers Grove in 2007 and lives there with her husband and two sons. While she now attends more social and networking events downtown, her commute, once a 10-minute drive, now gets her home at 7:30, an hour later than before.

The kids’ dinner-and-homework routine now falls to her husband, a consultant.

Mr. Scherf, who was a manager of shopper insights at Hillshire and now works at Pfizer Inc. PFE +0.93% ‘s Itasca, Ill. office, said the company’s move was “the tipping point” in his decision to leave, largely because he didn’t want to be beholden to train schedules. He also felt unnerved by layoffs and an accelerating “cycle of change.”

As young workers start families, they may care more about soccer fields and good schools than sushi restaurants and bike paths, priorities that may send them out of the urban core.

But the employers that sought them out in the city are unlikely to follow them back to the suburbs, said Mr. Phillips of the Urban Land Institute.

“Given energy prices and traffic conditions, it’ll be a long time before we see another wave of suburbanization.”

Write to Lauren Weber at lauren.weber@wsj.com

Housing, Residential Real Estate, Think Outside The Box, Twin Cities Real Estate, Uncategorized, UST Program News, UST Real Estate in the News

Construction Moves Forward on House to Benefit UST Real Estate Programs

Contractors are taking advantage of the good weather and are making good progress on the construction of the house that is being built to be sold with excess funds going to benefit the Real Estate Programs at the University of St. Thomas.

Workers were busy last week setting the trusses on the UST Real Estate House located at 6443 McCauly Terrace in Edina. Construction began in mid-October when crews excavated the basement and began pouring the foundation and the basement walls. Framing is expected to be completed next week. The house will be completed in mid-February just in time for the R E House 1house to be featured in the 2014 spring Parade of Homes. The general contractor on the project is JMS Custom Homes who is also a major sponsor, donating its services to make sure the house is completed on budget and on time. Building the house to benefit the Real Estate Programs at the University of St Thomas was a concept that was proposed and adopted by the UST Real Estate Advisory Board (REAB) as a major fundraising initiative. The idea behind the project was to solicit the donation of cash and/or building materials that will be used to build the house at a greatly reduced cost basis. The subcontractors are providing services and/or materials for the project at no cost, or at reduced cost, to help reduce the cost of construction. Many of the members of the Advisory Board have made donations towards the project or used their connections to locate other donors.   The difference between the sale price of the home and the cost to build the home will be donated to St. Thomas to support scholarships for St. Thomas students enrolled in the university’s real estate degree programs.


R E House 3a

The project will also provide hands-on experience for St. Thomas students. Two UST undergrad real estate majors are working as interns with JMS Custom Homes during the construction and sale of a single-family home. These students are getting valuable experience as they work throughout the permitting and construction process from start to finish.


UST House Rendering

Sponsors to date include; Crown Bank, Edina Realty, JMS Custom Homes, Marvin Windows and Doors, Shenehon Company, Alexander Design Group, Metropolitan Pipe and Supply, Outdoor Designs, Builders Association of the Twin Cities, Kraus Anderson, Barton Sand and Gravel, Cemstone, Muska Lighting, Regalwood Cabinets, Veit, Warners Stellian, and Ziegler.