4 Best Cities To Invest In Commercial Real Estate Through Crowdfunding In 2021
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When it comes to investing in real estate, the old adage of “location, location, location” still rings true. Demand for different properties, whether it be a new apartment building, medical office, or data center, will vary from metro to metro and can impact the long-term success of the project. As a leading online real estate investment platform, CrowdStreet is constantly looking for properties in cities where demand for that asset outstrips supply, creating opportunities for investors.
CrowdStreet recently published their 2021 Best Places to Invest report, which outlines top markets nationwide, as well as by asset class, so investors can better understand why these are some of the favorite markets to keep their eyes on.
The Best Places To Invest In Commercial Real Estate In 2021
Simply put, Dallas-Fort Worth is a juggernaut economy. It is also, seemingly, the favorite location for the relocation of corporate headquarters from California. Between 2017 and 2020, DFW added more than 10,000 high-tech jobs and last year the area landed second on CompTIA’s Tech Town Index 2020 for tech job openings, beating San Francisco. In fact, CBRE data shows the region has a tech workforce that can rival all large tech talent markets.
Based on an analysis of federal labor data, CBRE also found that DFW is the most affordable metro among the top-five markets for tech workers. And where people move, the real estate market rises to meet the occasion. Consistent population and job growth, a business-friendly central location, and a favorable tax environment all coalesce in DFW to provide strong underlying fundamentals for multiple asset classes including multifamily and industrial properties, creating multiple opportunities for investors.
Our favorite industrial markets are located in proximity to large populations with excellent access to highways, railway, and seaports. Given the characteristics of DFW, it’s not surprising that this metro made our top five.
Idaho was the fastest-growing state in the nation in 2019 according to 2020 Census data. Over the past decade, Boise experienced a 9.3% increase in growth while comparable cities in the northwest like Spokane, Washington, and Salt Lake City, Utah, only experienced 6% and 7.6% growth, respectively. Over the last five years, Californians made up 46% of the migration to the area, according to the Boise Valley Economic Partnership.
Arguably the number one beneficiary of COVID-19 induced migration, where office workers can now work remotely from anywhere, Boise is leading the nation in year-over-year housing appreciation and hit a blistering 20.1% in 2020. With tight housing stock and high home prices likely to be the region’s new normal for the foreseeable future, multifamily properties will become even more valuable.
When ranking our top multifamily development markets, CrowdStreet prioritized markets that have demonstrated above-average rates for both population and job growth with an expectation of those trends to continue–Boise easily made our top three.
Florida’s population grew by 2.7 million, 14.6%, between 2010 and 2020, according to US Census data. This is double the rate of overall U.S. population growth. Miami is Florida’s largest and most cosmopolitan metro and given its physical location, Miami is highly land constrained, meaning space is at a premium.
The city benefits from a low tax and business-friendly environment that provides for above-average job growth. Major employers, including Goldman Sachs, Blackstone, and even Subway, are considering moving certain functions into this market.
The hotel sector was undeniably the hardest hit in 2020 and the first to feel the effects of the COVID-19 pandemic but Miami is also our number one hotel market that will think will bounce back post-vaccine. Miami International Airport (MIA) reported its largest single-day passenger count of the past year back in March and the number of daily flights at MIA is also slowly returning to pre-pandemic levels. American Airlines, the busiest airline servicing MIA, announced in February that it plans to provide 16% more seat capacity at the Miami airport this upcoming summer. Southwest Airlines launched its first flights to and from Miami in November 2020.
From 2010 to 2019, the population in the Midwest grew by just 2.0%, according to U.S. Census data, but a surge in net migration to the state over the last two years has led to Indiana’s strongest population gains in a decade, with much of that growth happening in urban areas. The 11-county Indianapolis metro area accounted for 60% of Indiana’s net growth in 2019 and is home to more than two million people, which represents 31% of the state’s population and ranks as the nation’s 33rd-largest metro area.
With its centralized location (80% of the U.S. population is within a day’s drive), Indianapolis sits at the convergence of four major interstates making it a key midwest distribution hub. In addition to its roads and rails (Indiana is 3rd in total freight railroad miles), Indiana has the only statewide port system with direct waterway access to both U.S. coasts. Thanks in part to this transportation network, Apple is building a $100 million distribution center near Indianapolis as part of the company’s plans to expand its distribution network and accelerate delivery times for U.S. customers.
CrowdStreet focuses on commercial real estate investment opportunities (as opposed to single-family fix-and-flip or rental properties) and, as we mentioned earlier, not all metros are created equal. We leveraged a variety of objective metrics, including population and job growth, but whether you call it a metro’s “vibe” or “quality of life,” CrowdStreet’s most favored markets tend to possess a blend of our favored subjective attributes as well.
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