Real Estate Development Tip: Follow the Fixies

Real estate developers use many different techniques and tricks to sniff out the Next Big Thing. Attending the Brooklyn Real Estate Summit, Brendan O'Connor of the Awl describes how the developers found Brooklyn. One developer, Richard Mack, visited Williamsburg:

Mack recalled hearing about how, many years ago, in Williamsburg, there were cool boutiques and artists living in warehouses. “That said to me, this is a place where young people want to live,” he said. “We just followed that trend.”

Which is why, in Williamsburg today, there are no artists living in warehouses. Now, he uses more subtle techniques: he follows the fixies.

“Don’t underestimate the change in commutational patterns as cycling becomes more important.” When looking to identify neighborhoods for residential investment and development, Mack said, “we’re looking for places where there are bike lanes, but more importantly where people are riding fixed gear bikes. I know that sounds funny.” The crowd laughed. “But go to Portland, Oregon. Go to downtown Seattle, downtown Los Angeles. Go to the greater neighborhoods of San Francisco. You’re gonna see a disproportionate amount of fixed gear bikes. You may laugh, but commutation patterns by bicycle are changing the way that cities are developed.”

It is part of a larger trend, where young people are less interested in buying cars and more interested in living in areas serviced by good transit and bike lanes. As Darren Ross notes in Fast Company, sales to people aged 18 to 34 fell almost 30 percent between 2007 and 2011, admittedly also the middle of a severe recession. But that wasn't the only reason:

Because millennials use technology in every facet of their lives—from mobile phones to tablets and laptops—to connect with friends and family and to get work done, the tech gadget is their most prized possession, and has a much higher value to a CMC [college millennial consumers] than transportation or owning a car. Think about it: while CMCs are likely to share a car and a ride, there’s no way they would ever share their phone.

Mack says "We think it’s clear that there’s an impulse, among ‘Millennials’ particularly, to reduce the city’s reliance on cars" and notes how the trend away from cars is affecting his buildings.

Mack plans to build “more bike parking, less car parking. As much as we can get away with. Also it’s less expensive.” Kliegerman [President of developer Halstead] said that one of Halstead’s buildings in Manhattan offers a bike concierge. “They have a bike mechanic, too,” Kliegerman said. “Full service.”

In Toronto, where I live, developers have been following the fixies for years, as the warehouses and buildings housing the artists get knocked down for condominiums. Gentrification has got so extreme that a part of the first wave of gentrifiers, Sam James Coffee Shop, has been evicted so that Shinola can move in, which ironically sells fixies. They are even doing petitions. But I don't think any of our buildings have a full service bike mechanic. I suppose that's next.