Over the course of the past several decades, many urban neighborhoods and inner-ring suburban town centers have been largely forgotten or avoided by investors and developers, due, in part, to widespread misperceptions about the extent of urban buying power and the lack of viable “in-town” opportunities. Today, despite a renewed interest in urban areas, the vast majority of development and investment still occurs on suburban greenfield sites, and as a result, numerous urban centers have suffered from the lack of residential and retail infrastructure needed to ensure healthy neighborhoods and strong communities, at the expense of unchecked suburban development. According to recent studies, every percentage point increase in population in a suburban area results on average in a seven percent increase in land use. In many suburban communities, there is now a growing backlash to greenfield development because of traffic, school, crowding, and other issues. Many municipalities have attempted to impose restrictions on new residential development, but still developers press on, building new office parks next to older, recently-vacated buildings, or pushing far-flung residential development into rural communities and bypassing older urban centers and first-tier suburbs where there is ample opportunity for redevelopment. This exclusive focus on greenfield development maximizes immediate profit at the expense of longer-term returns and result in a negative impact on social and physical environments.
We believe there are numerous trends redirecting growth back into existing metropolitan areas and are certain that there are corresponding and compelling economic and philosophical reasons to reinvest in America's existing towns and cities. Urban living is becoming more popular among young couples, empty-nesters, singles, the elderly and nontraditional households; immigrants are flocking to urban cores as low-cost places to open small businesses, stores and restaurants; retailers are returning to urban markets because their traditional suburban markets are saturated; states are increasingly concerned about the effects of sprawl and are instituting smart growth policies; pedestrian-oriented, street front retail environments are gaining favor with today’s consumers; inner-city crime has declined dramatically in the past ten years; and local governments are using increasingly sophisticated planning, regulatory, and financial incentives to encourage market-based real estate investments in distressed urban neighborhoods. We intend to capitalize on these trends.
Our philosophy of Responsible Development revolves around three central principles: reclamation of underutilized real estate, reuse of existing buildings and materials, and rehabilitation of real estate and the communities it serves. Responsible development is not the lowest-common-denominator approach toward real estate development and profit, but we believe it will maximize medium- and long-term returns; to our investors, to us, and to society at large. By recycling materials, adaptively reusing existing buildings and sites, incorporating efficient energy systems and increasing population density (rather than sprawl), we believe that we can maximize long term returns while avoiding the material detriment to local environments and communities often associated with greenfield development. Thames Street Capital Group feels strongly that the application of a Responsible Development ethos to urban redevelopment will not only reward investors but will also foster societal development by creating new jobs and bringing new goods and services to underserved communities.
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