Reimagining Cities-Disrupting the Urban Doom Loop

• Downtowns, in particular, need more housing. Downtowns have a mean Live share that is below the lower end of our estimates (19.2%), while Urban Commercial WalkUps have a mean Live share that is slightly above the upper end of our estimates (53.2%). • Some have too much, and some have too little. While 117 of all WalkUPs have a Live share over 32%, 70 have Live exposure above the margin of error band. In addition, 38 of the 70 WalkUPs with Live shares above the margin of error band are Urban Universities, which may skew more toward Live because most of their “customers” (students) live on or around campus. A total of 38 WalkUPs have Live shares below the low margin of error estimate. • WalkUPs are generally under-indexed to Play. Play has the lowest optimal mean percentage estimate at 26.4%, but this is well above the current average and mean share for all WalkUP types. This is consistent with WalkUPs redefining themselves as consumption centers that draw on visitors to fuel economic activity and GDP. • Different retail in a different real estate product mix (as the portfolio mix changes) is still essential for all WalkUPs. Despite the fact that ground floor retail in office-centric WalkUPs is struggling in today’s market, we should not conclude that cities do not need retail in those physical locations. Rather than catering to office commuters, as offices get repurposed, those retail spaces will be needed for new tenants in different categories, including experiential and local-serving retail (grocery, drug and hardware stores) for residents. Local-serving retail is one of the largest categories of retail and the least risky. • Most have too little. Only 26 of all WalkUPs have a Play share over 26% and only 10 have Play exposure above the margin of error band. A total of 141 WalkUPs—more than half of those included in this study—have Play shares below the low margin of error estimate. This is consistent with Cushman & Wakefield’s retail data that show historically low vacancy rates with virtually no new supply currently under construction. A decade of underbuilding in the wake of the retail apocalypse has contributed to market conditions in which occupiers actually struggle to find good, well-located retail space. What better location than in a centrally located WalkUP with large volumes of foot traffic. Play:

Reimagining Cities: Disrupting the Urban Doom Loop 77