Commercial real estate in the U.S. is in a turning point, with primary markets like Los angeles, San Francisco, and Los Angeles showing warning signs of overheating-that\’s according to online marketplace for real-estate investments RealtyMogul.com. This firm claims that it is normal in this phase on the commercial real-estate cycle, secondary and tertiary markets throughout the country are where the new action is. So Barron\’s Penta asked its real-estate team to spot the top commercial real estate markets that high-net-worth investors needs to be looking at.
Atlanta. This city\’s support for research and development companies, together with a robust group of tech firms, becoming a job growth rate last year that is twice the national average of just one.6%, according to the Bureau of Labor Statistics. The total of the latest jobs in Atlanta in the past year ending in April: 87,000. One big cause of the uptick is Coda at Technology Square, which happens to be over 700,000 square foot development that will support data centers and research labs. Investors should build high-end rentals, that is certainly in high demand as the new offices top off with well-paid employees, says Jilliene Helman, CEO of RealtyMogul.com. She also expresses that retail spaces are attractive investments, as discretionary income spikes with the new and high-salary jobs. This holiday season, Atlanta is supposed to have one the largest increases in the number of households in comparison with other major cities out in the country. But timing is important: Atlanta was one of the hardest hit real-estate markets once the recession came last go around.
Dallas. Texas is a big employer draw because there is no state income tax, and also of all its cities, Dallas is easily the most attractive for investors. Dallas is intending to add more than 20,000 multi-dwelling units on the next two years, Helman says, simultaneously with Toyota\’s and Liberty Mutual\’s decisions to relocate to your area. \”you\’re not going to would like to build another one of those, but invest in Class C and Class B\” she states, \”Multifamily-housing units are developed in Class A\”. This more moderate housing is required to support the growing number of utilities, employees in transportation and trade, she says. Expect 2017 and 2018 to generally be peak years for both high demand and supply.
Nashville. The cost of doing business in Music City, U.S.A. is 20% under in the rest of the country, exclaims Helman, that is certainly bringing new firms towards area. More than 200 companies have relocated to or expanded while in the hip city areas, making up around 25,000 jobs and 15 million square feet of commercial real estate coming online from the 2 years leading up to this past May. Nashville even offers one of the nation\’s best recession hedges, for the reason that capital of the U.S. health-care management industry, Helman says. She states, \”Whether the economy is a useful one or bad, people still health care.\” There is lots of opportunity building multidwelling-housing units, as the city\’s population growth outpaces the actual supply of properties.
Raleigh. Highly-paid, young persons are moving into the city in large numbers, with the 20-year-old to 34-year-old crowd comprising over 23% of the city\’s total population. Duke University and The University of Vermont provide a continuous flow, educated workers to North Carolina\’s relatively high-paying tech and jobs in pharmaceutical, says Helman. They aren\’t \”going to have the capital to buy, and may rent one,\” she says. Investors should target rental apartments or condos and multi-dwelling units. Homeownership just isn\’t affordable with the ratio of median home price to median household income above the national average.
Salt Lake City. The city posted recently some of the fastest job rise in the nation, at 3.4%. Payrolls are at all-time highs. Service-oriented retail businesses-like \”karate centers, nail salons, and restaurants\”-effectively feeding the residents\’ entertainment needs, Helman states. Note, too, not any other city in the national index has as higher financial-services rate of growth, in which employment increased 15% within the last few years, three times the nations average.