Secondary Property Markets in U.S. Enjoying Development Resurgence

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According to a new study by CBRE, secondary property markets in the U.S. Midwest are experiencing a surge in mixed-use urban development and population growth as residents shift away from the suburbs to downtown.
 
Five of the eleven cities in the study--Indianapolis, Cleveland, Detroit, Pittsburgh and Minneapolis--currently have more than $1 billion worth of new construction projects underway.  In addition, 10 of 11 cities in the study have experienced significant overall population growth over a 10-year period from 2005-2015, doubling and even tripling in some cities such as Kansas City, which grew from 5,500 residents to 19,900, and Cincinnati, which grew from 7,500 to 15,000. Other cities in the study, including Columbus, Cleveland, Minneapolis, Milwaukee, Detroit, St. Louis, Indianapolis, Pittsburgh and Louisville, also experienced significant population increases.
 
What's more, these metropolitan service areas are very appealing to companies as they support a highly-educated population--eight of the 11 cities outpace the national average when it comes to a percentage of the population with a bachelor degree or higher in the metropolitan statistical area (MSA).
 
In response, both established Fortune 500 companies, as well as growing companies in emerging sectors such as technology, are taking notice and either relocating or expanding into these markets in an attempt to capture the young workforce and talent that desire to live in these urban locations. Currently, the 11 markets in the study are home to a combined 74 Fortune 500 companies.
 
"As urbanization trends continue to take place across the country, these secondary markets in the Midwest are uniquely positioned to benefit from corporate and community reinvestment projects," said Spencer Levy, head of Americas Research. "These markets offer a highly-educated and skilled workforce, as well as excellent infrastructure for construction and adaptive reuse opportunities. We don't predict any slowdown in this activity in the near future as these trends have steadily increased for the past decade."
 
According to the report, urban reinvestment has led to increased construction spending, particularly on mixed-use projects that attract residents, especially millennials, seeking the live-work-play lifestyle that gives them quick access to work centers and puts them within walking distance to entertainment and shopping.