Counting cranes has long been a way to estimate the economic growth of a market. And while you might spy dozens in major metros like New York City, Los Angeles, and Chicago, these 24-hour cities are no longer the only markets worth a crane count.
Eighteen-hour metro markets are cities with above-average urban population growth and a lower cost of living relative to 24-hour cities. These cities are also exploding with real estate projects and providing new opportunities to commercial real estate investors. The big success stories have been cities like Denver, Austin, and Nashville. But other markets are hot on their heels.
In 2017, the CrowdStreet Investments team predicted that the next 18-hour cities would include Milwaukee, WI, Columbus, OH, Charleston, SC, and Kansas City, MO. Our latest research, Market Views, reviewed the performance of those four markets over the last two years. How have those cities measured up?
Here are a few highlights from each market:
Major investments are changing the face of downtown. One of the largest real estate projects of 2018 was the $524 million Wisconsin Entertainment and Sports Center, home of the Milwaukee Bucks NBA team. A new streetcar, known as The Hop, will soon run downtown within a quarter-mile of the most densely occupied office towers, including the headquarters of Northwestern Mutual, who recently invested $450 million into their downtown space.
Millennials are moving downtown and driving the city’s economic growth. Most notably, Columbus’ labor force and population, specifically college-educated millennials, have grown tremendously and that doesn’t seem to be slowing. Thanks to the millennial migration, Columbus has a higher than average population of prime workers (employees ages 25-44).
Charleston, South Carolina
Employers are expanding, fueling tremendous job growth. Charleston is booming as employers are flocking to the area. Volvo recently expanded into a $1.1 billion factory that will hire on an additional 4,000 employees and according to the Chamber of Commerce, 9,000+ jobs were created in 2018 alone. Charleston’s average five-year job growth of 2.9% is nearly double the national average of 1.6%!
Kansas City, Missouri
A centralized city that distribution centers need a presence in. E-commerce has revolutionized warehousing and other retailers are under pressure to have Amazon-like two-day shipping. The need to have major warehouses and distribution centers in centralized areas like Kansas City is in high-demand to national distributors and supply chain operators.
While all four markets are growing, after an in-depth look at several key metrics, our Investments team felt that Charleston had the best claim as the next big up-and-coming 18-hour city. Want to know more? Register for a free account with CrowdStreet and you’ll get a copy of our full research report for free.
There are always going to be cranes, and ergo investment opportunities, in 24-hour cities. But bigger markets mean bigger competition with deep pockets, which often edge out individual investors. Eighteen-hour cities, on the other hand, are growing fast and have high-demand for tenants and new investors alike.
CrowdStreet is a content partner of Benzinga.
This article was written by an employee of CrowdStreet, Inc. (“CrowdStreet”) and has been prepared solely for informational purposes. CrowdStreet is not a registered broker-dealer or investment adviser. Nothing herein should be construed as an offer, recommendation, or solicitation to buy or sell any security or investment product issued by CrowdStreet or otherwise. This article is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate.
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