In 2007, Tishman Speyer bought New York City's iconic Stuyvesant town for an ungodly price of $5.4B. Their plan was to take the former MetLife buildings built for returning servicemen from WW2, revamp them, and turn the residences into luxury condos.
Four years and a handful of heavyweight investors (Bill Ackman, etc) later, Stuytown remains the same grounds it has been for years. What these high-powered investors with the deepest pockets did not realize was that they were fighting one of the strongest cultural trends I have ever seen: New York City frugality.
From an investment perspective, fighting cultural trends must be considered. These trends can shift over time, but they are like the titanic heading towards an iceberg, they take time to turn. I don't know how Stuytown plays out, but I can guess 10 years from now, it will look very similar as it does today.
I enjoy thinking about the cultural implications of any situation. Whether it is geographic, demographic, or psychographic they all must be considered, especially when investing in new ideas and trends. I am keeping my eyes open for new cultural trends and will write as I see them.
Picture: Original 1947 Stuyvesant Town