Reimagining Cities-Disrupting the Urban Doom Loop

PLACES PLATFORM, LLC/CUSHMAN & WAKEFIELD PRODUCT DIVERSITY INDEX To explore the hypothesis that product portfolio influences valuation PPSF and GDP performance, we created a “diversity index” that measures the level of product diversity in any given WalkUP. The index of zero indicates sole reliance on one product while a maximum value is 100 and represents the most diverse of all 208 WalkUPs included in this study. We call this our Places Platform, LLC/Cushman & Wakefield (PP/CW) Product Diversity Index. One way to frame our analysis is to start at the WalkUP level. Between the PP/CW Product Diversity Index and total real estate PPSF,

we see a weak, slightly positive correlation. However, Downtown WalkUPs saw greater valuation PPSF growth from 2019 to 2023 as their PP/CW Product Diversity Index increased. Every 1% increase in the PP/CW Product Diversity Index was associated with a 0.4% increase in Downtown total real estate PPSF growth. Of course, this may reflect Downtown over-reliance on office since decreases in office shares will increase the diversity index. A counterintuitive finding was that Urban Commercial areas actually performed worse (a downward slope) as the PP/CW Product Diversity Index increases, indicating that these types of WalkUPs may have more optimal levels of product-specific mix already, based on our findings in the final section.

PP/CW PRODUCT DIVERSITY INDEX VS PPSF CHANGES 2019 PDI level vs 2019-2023 % change in total real estate PPSF

Downtown Downtown Adjacent

Urban Commercial

Urban University

Source: Places Platform, LLC; Cushman & Wakefield Research

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