Key Highlights
- Unison looks at implications of resiliency and vulnerability in relationship to jobs, cities and real estate investment
- “Guide to Residential Real Estate Investing” highlights latest business realities, behaviors and short and long-term real estate demand since COVID-19 outbreak
In its latest “Guide to Residential Real Estate Investing,” Unison, a co-investment management group based in San Francisco, looks at how the words resiliency and vulnerability may relate to work behaviors, jobs, cities and real estate investment in the post-COVID US.
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Vulnerability is most often defined as the state of being exposed, attacked or harmed, according to the Oxford Dictionary. The Merriam-Webster Dictionary states that vulnerability is derived from the Latin noun “wound.” Resiliency, on the other hand, is often defined as the capacity to recover quickly or “spring back into shape” by the Oxford Dictionary.
Unison is looking at the words resiliency and vulnerability as they relate to jobs, cities and real estate investment. How resilient are particular jobs post-pandemic? How fast can particular cities recover post-pandemic? How vulnerable are particular real estate investments or how wounded, exposed or harmed are particular jobs, cities and real estate investments post-pandemic?
Stay-at-home lockdowns due to the COVID pandemic have given us a pretty good idea of jobs that are the most resilient and the most vulnerable even within block-group industries. Take, as an example of a block group industry, health care. Health care workers working in emergency services have done great…emergency services health care jobs are resilient. Health care workers working in non-essential services, in sharp contrast, have had their incomes and even their jobs cut. Non-essential health care jobs are vulnerable.
Unison’s approach to resilient and vulnerable jobs, cities and real estate investment is based upon data-driven frameworks such as employment statistics, demographics, economic activity and demographics.
In its “Guide to Residential Real Estate Investing: Resilient and Vulnerable Cities,” Unison says, “Residential real estate is one of the largest asset classes in the world. For portfolio managers, it is a core investment. For people, a home. And for society, an evolving center of economic activity.”
Unison relates “resilient job markets to outperformance in home prices” and “…classifies cities as resilient or vulnerable based on their employment composition by sector.”
Unison defines three employment sectors as resilient: information technology, professional and business services and financial services. It defines at-risk job loss/high job loss or employment sectors as vulnerable: leisure and hospitality, mining and oil and gas extraction, manufacturing, wholesale, retail, transportation and utilities and construction.
Unison connects those resilient or vulnerable employment sectors to resilient or vulnerable cities in which those employment sectors are located. Unison then advises its real estate clients to invest/not invest in resilient or vulnerable cities.
According to Unison, select vulnerable cities with high concentrations of at-risk job sectors and few “headline” sectors include:
- Las Vegas
- Miami
- Detroit
- San Diego
Select resilient cities with high concentrations of employers in Information Technology, Financial Services and Professional Services and low concentrations of at-risk job sectors include:
- Boston
- Washington DC
- New York City Five Boroughs
- San Francisco
Unison’s bottom line is that a real estate investment strategy that “…targets investments in resilient residential real estate (markets) forecasted to outperform the national benchmark.”
To get your copy of Unison’s “Guide to Residential Real Estate Investing: Resilient and Vulnerable Cities,” click
https://contentimages.o-prod.unison.com/images/im/downloads/Resilient-and-Vulnerable-Cities.pdf
Thanks to Unison’s Richard Fu, Brodie Gay and Sam Lin.
Also read: Podcast: Caution Looms, What Happens Next For Real Estate. | Tim and Julie Harris, Is Reopening Enough to Save Economy?, 65% Now Ready to Attend Open Houses Without Hesitations
