Icebergs, Zombies, and the Ultra-Thin by Matthew Soules

Author:Matthew Soules [Soules, Matthew]
Language: eng
Format: epub
Publisher: Princeton Architectural Press
Published: 2021-05-15T00:00:00+00:00

Standardized Real Estate Products

There is a tendency in the investment community to favor assets that easily fit into simple and clear categories. For example, REITs overwhelmingly invest in standardized architectural products. As Christopher B. Leinberger, chair of the Center for Real Estate and Urban Analysis at George Washington University, has written, in order for real estate developers to fully participate in Wall Street, “they have had to commodify what they build, and this has meant ensuring that each unit of each product type was adequately similar to every other. Such a situation has very quickly led to what can be called the Nineteen Standard Real Estate Products.”10

These “products” tend to be single-program and stand-alone. As Leinberger writes, “From an investment point of view, commodification has also resulted in extreme specialization. REITs today nearly all specialize in one product type or another.”11 One particular REIT will invest exclusively in power centers (large, big-box-oriented shopping centers, typically organized around a common outdoor parking area); another, in only commercial office space; and yet another, in only middle-income rental housing. The Simon Property Group, for example—the fifth largest REIT in the United States, with a market capitalization in 2020 of $44 billion—invests exclusively in malls and outlet centers, most of which are suburban.12 Leinberger argues that REITs are habitually reluctant to invest in programmatically heterogeneous architecture, propagating the single-use landscape that defines much of the United States. While American REITs have recently embraced “mixed-use” developments, they are still remarkably homogeneous and effectively simplistic. REITs’ bias against programmatic diversity exemplifies finance capitalism’s preference for simple real estate assets. The clearly identifiable asset—urban housing, golf property, view unit—further diminishes social complexity and shifts “all real estate is local” toward “all real estate is global.” The process of simplification thus seeks a post-social condition for architectural assets at the same time that it pursues asset clarity. This parallel reduction of social complexity and heightened asset clarity allows built space to function more optimally according to the demands of finance capitalism.

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