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In Part 1, we focused primarily on the financial and experiential components of the commercial real estate (CRE) markets for 2020.
In Part 2, we discuss the best places to invest.
It's called "hipsturbia," an apt name that describes a community favored by Millennials. In the typical hipsturbia, there is a suburban live-work-play environment that includes access to mass transit, walkability, and plenty of retail, dining, and recreation options. This helps drive the options for commercial real estate for sale.
In their comprehensive report, "Emerging Trends in Real Estate 2020," researchers at PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI) list the following areas as the top markets for real estate investing based, in part, on their past ability to "consistently attract investor capital."
• Austin, TX — Deep pool of talent, unique and popular lifestyle, and ambitious commitment to business and real estate expansion.
• Raleigh/Durham, NC — Impressive investment in its suburban office and multifamily sectors; topped the rankings for homebuilding prospects.
• Nashville, TN — Expectations are strong for continued investment and development
• Charlotte, NC — Attracting technology and manufacturing firms as it continues to diversify its economy beyond the banking sector that dominated over the past 20 years.
• Orlando, FL — Local experts anticipate that the expansion of the rail link from Miami - now under construction — will boost already robust tourism flows.
• Atlanta, GA — A once-neglected urban core is seeing a resurgence of in-town living, and suburbs are transforming into hipsturbias as they aim to create walkable mixed-use developments.
• Boston, MA — Enjoys strong structural advantages including its outstanding educational institutions, which act as a talent magnet, and its powerful tech industry, which accounts for 10 percent of Boston’s jobs base.
• Dallas/Ft. Worth, TX — Texas has no state income tax, a feature much promoted by economic developers.
• Los Angeles, CA — Seeing a remarkable downtown resurgence, especially in the multifamily sector, for neighborhoods like the Arts District and South Park.
• Seattle, WA — Remains in expansionary mode. There are 8.8 million square feet of new office buildings underway, half of which are in the Lake Union submarket, spurred by the tech industry.
One of the red flags raised in the PwC/ULI report is the dearth of middle-income housing, which will ultimately have an effect on the status of commercial real estate transactions. If, however, the real estate market remains true to its past, favorable adjustments will be made accordingly.
* Read part 1 of our Commercial Real Estate Market Forecast Now!