The Top 5 Real Estate Markets for Investors to Watch

Posted on July 25, 2019

Interest for new commercial real estate use is growing, thanks to the economy remaining in good standing, technology that continues to shape the market, and demand for innovative spaces. With half of 2019 behind us, our research shows that these five markets have the highest potential for growth for the remainder of the year:

Industrial Spaces

With the growth of online retailers and same-day shipping services like Amazon, industrial real estate demand skyrocketed last year. We expect the same to stay true in 2019 and beyond. However, it’s not just eCommerce organizations that are driving the industrial buzz, up and coming concepts such as food halls, co-working spaces, legalized marijuana, and urban dwelling have begun to reshape the way industrial spaces are being utilized. For example, turning automotive plants into restaurants and parking lots into multifamily units. The industrial vacancy rate in Metro Detroit is 3%, which is the lowest in recent history. The future for industrial holds endless opportunities.

Suburban Areas

Millennials, those as young as 23 and as old as 38, are one of the largest populations in the world. Sources expect this generation to outnumber America’s Baby Boomers in the next few years. This generation is beginning to focus on placing roots and starting families, gravitating towards the suburbs. Investors looking to capitalize on this generation should consider investing in commercial properties within the surrounding suburban areas where multifamily homes, retail spaces, and offices will be in demand over the coming decade.

Senior Housing

The senior care sector has been a growing market as Baby Boomers begin to age. It’s estimated that by 2035, the number of Americans 65 and older will reach 79.2 million. This rising number will likely create a demand for more assisted living and long-term care facilities, nursing homes, or independent elderly communities.

Commercial Office Space

As the demand for office-using jobs continues to increase, the value of commercial office space continues to rise, specifically in once overlooked secondary markets. With construction costs continuing to climb, new developments will likely take a back seat and repurposed office spaces in Commercial Business Districts will be in high demand. Take, for example, the co-working boom. The growing trend of repurposing floors in Class B or C office buildings to Class A standards and allowing various businesses to rent the space they need. Providing them with an updated, trendy office at little cost to them. Leaving the door open for new, out of the box uses for old spaces.

Multi-Family

As the recession made its mark on the economy, it also left its mark on the multifamily market. The number of single-family homes that have been converted to rentals during this time sparked extreme interest. That change coupled with a shift in focus on amenity-rich buildings, resort-style living, and urban lifestyles initiated the multifamily boom. Over the last decade, there has been a plethora of multifamily construction taking place across the United States. The attraction of multifamily development is so profound that investors are waiting for the day that supply outweighs demand.

Reach out to learn more about the changing investment landscape.

Jared Friedman
Director of Opportunities