Why New York is out and Nashville is in for real-estate investors
2015-10-12
Doing business is pricey in the largest U.S. metropolitan areas, which has prompted companies to consider locating in more affordable cities that have vibrant downtown neighborhoods, good public transit systems, walkability and culture, according to a new report. Residents may seek out these alternatives too, looking for a more reasonable cost of living.
Goodbye, New York. Hello, Nashville!
Dallas/Fort Worth, Austin, Charlotte, Seattle, Atlanta, Denver and Nashville were the top cities (in that order) on a list of markets to watch in PricewaterhouseCoopers and Urban Land Institute’s annual “Emerging Trends in Real Estate 2016” report. These cities were followed by San Francisco, Portland, Ore., and Los Angeles. (New York City landed at No. 15.)
The list was based on a survey of 1,800 real-estate investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants who were asked where they’d allocate capital in the future.
But today they’re looking more broadly at markets across the country that are positioned to lure companies and residents.
These cities are alluring in large part because they generally have a lower cost of doing business than “gateway” cities like New York, San Francisco and Los Angeles. That’s no small point, given the fact that smaller businesses are generating jobs at a faster clip than large ones, Mitch Roschelle, PwC’s real estate advisory leader, said.
Companies with fewer than 50 employees are generating more new jobs than larger companies by a rate of almost five to one, Roschelle said.
For startups, a low cost of business can be critical to success.
Markets like Dallas, Austin and Charlotte are also very livable for workers. They’re 18-hour cities, where businesses, restaurants and other services operate almost all day. The cost of living also tends to be more favorable. (Instead of sharing an 800-square-foot apartment in New York, someone might be able to buy a home of their own in these locales, said Kathleen Carey, executive vice president of ULI.)
That isn’t to say everyone will turn away from the Big Apple. “New York, San Francisco, they’re never going to be less than extremely popular,” especially for Fortune 500 companies, Carey said.
And there are certain types of businesses that may always remain in these cities. Finance and media companies, for example, may never break their ties with New York, while technology companies may not be able to resist San Francisco.
But the top cities on the list are viable alternatives that are growing in popularity.
Take Nashville, which this year made the top 10 list for the first time.
The universities there make the city “sticky,” meaning some students go to school in Nashville and decide they want to stay (much like Boston was for the baby boomers), Roschelle said. It’s also easier to own a home there: Nashville’s median home price was $208,500 in the second quarter; the U.S. national median was $229,400, according to National Association of Realtors data.
Real estate in the suburbs is also getting another look from investors these days. As millennials settle down and move from their city apartments into suburban homes, some jobs might follow them out of the city center.
It’s worth noting, however, that it’s a certain type of suburb that wins the heart of a millennial. As one survey respondent noted, “this group won’t move to the suburbs of their parents,” instead opting to live in areas that are close to the city, with good public transportation and a good mix of shopping, dining and entertainment.
Source: http://www.marketwatch.com/story/why-new-york-is-out-and-nashville-is-in-2015-10-07
Goodbye, New York. Hello, Nashville!
Dallas/Fort Worth, Austin, Charlotte, Seattle, Atlanta, Denver and Nashville were the top cities (in that order) on a list of markets to watch in PricewaterhouseCoopers and Urban Land Institute’s annual “Emerging Trends in Real Estate 2016” report. These cities were followed by San Francisco, Portland, Ore., and Los Angeles. (New York City landed at No. 15.)
But today they’re looking more broadly at markets across the country that are positioned to lure companies and residents.
These cities are alluring in large part because they generally have a lower cost of doing business than “gateway” cities like New York, San Francisco and Los Angeles. That’s no small point, given the fact that smaller businesses are generating jobs at a faster clip than large ones, Mitch Roschelle, PwC’s real estate advisory leader, said.
Companies with fewer than 50 employees are generating more new jobs than larger companies by a rate of almost five to one, Roschelle said.
For startups, a low cost of business can be critical to success.
Markets like Dallas, Austin and Charlotte are also very livable for workers. They’re 18-hour cities, where businesses, restaurants and other services operate almost all day. The cost of living also tends to be more favorable. (Instead of sharing an 800-square-foot apartment in New York, someone might be able to buy a home of their own in these locales, said Kathleen Carey, executive vice president of ULI.)
That isn’t to say everyone will turn away from the Big Apple. “New York, San Francisco, they’re never going to be less than extremely popular,” especially for Fortune 500 companies, Carey said.
And there are certain types of businesses that may always remain in these cities. Finance and media companies, for example, may never break their ties with New York, while technology companies may not be able to resist San Francisco.
But the top cities on the list are viable alternatives that are growing in popularity.
Take Nashville, which this year made the top 10 list for the first time.
The universities there make the city “sticky,” meaning some students go to school in Nashville and decide they want to stay (much like Boston was for the baby boomers), Roschelle said. It’s also easier to own a home there: Nashville’s median home price was $208,500 in the second quarter; the U.S. national median was $229,400, according to National Association of Realtors data.
Real estate in the suburbs is also getting another look from investors these days. As millennials settle down and move from their city apartments into suburban homes, some jobs might follow them out of the city center.
It’s worth noting, however, that it’s a certain type of suburb that wins the heart of a millennial. As one survey respondent noted, “this group won’t move to the suburbs of their parents,” instead opting to live in areas that are close to the city, with good public transportation and a good mix of shopping, dining and entertainment.
Source: http://www.marketwatch.com/story/why-new-york-is-out-and-nashville-is-in-2015-10-07
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