A recent demographics report shows that 80% of the U.S. population now lives in an urban area, a statistic that has been driven up significantly by the housing market collapse and falling appeal in suburban homeownership. The surge in urban growth has led developers back to cities that once suffered from stagnation. One example is the new Whole Foods that has been built in Midtown celine dion ticket packages Detroit, a city where an upscale market would be unthinkable just a few years ago. Development of multifamily housing in urban centers is also booming as more people shed mortgages and move into rental properties. For more on this continue reading the following article from National Real Estate Investor .
When upscale grocery chain Whole Foods broke ground for its first store in Detroit this May, the move may have seemed like an aberration. While the Austin, Texas based retailer has always had a presence in cities, it normally concentrated on more affluent neighborhoods and high-traffic celine dion ticket packages mixed-use properties; for example, the Time Warner Center, across from Central Park in New York City.
Time Warner Center with its mix of upscale shops, multimillion dollar condos and location in a tourist-filled corner of Manhattan with a major subway hub beneath it has the ability to pull in both local residents and those New Yorkers from the outer boroughs celine dion ticket packages who can fill their shopping carts on the way home from work. It s a far cry from Midtown Detroit, a neighborhood with a much lower population density and household income that has been struggling for the past 25 years, according to Susan Mosey, president of Midtown Detroit Inc., a nonprofit planning and development organization devoted to Midtown s revitalization.
Recently, however, Midtown Detroit s face has been changing, which is why Whole Foods wants to open a store there. Prior to the Great Recession, Detroit was considered the prime example of urban decay. From 1950 to 2000, the city lost more than 48 percent celine dion ticket packages of its residents, dropping to a population of less than a million, according to the Web site Demographia. But thanks to incentives ranging from a $2,500 rent allowance for employees of major local institutions who opt to move to the neighborhood to a planned 10-mile pedestrian and bicycle trail connecting Midtown and Downtown Detroit, the city is becoming a magnet for echo boomers, a generation born between the late 1970s and the early 2000s. Approximately 37 percent of people who come through its Live Midtown program are between the ages of 20 and 29, reports Midtown Detroit Inc.
Many people are coming here because they find Detroit an interesting city, says Mosey. Young people want transportation celine dion ticket packages options; they want interesting locally produced foods; they want job opportunities.
What s happening in Detroit is emblematic of a nationwide trend of the growing popularity of urban living, which has intensified in the wake of the housing crisis of the late 2000s, as owning a house in the suburbs has lost much of its appeal. According to the 2010 census, more than 80 percent of the country s population now lives in urban areas. In June, the U.S. Census Bureau reported that during the 2010 11 period, population in 27 of the largest U.S. city centers grew faster than in the surrounding suburbs for the first time since the 1920s.
The echo boomers, who number approximately 80 million, are among the primary drivers for this trend. A recent study by commercial real estate services firm Jones Lang LaSalle found that people in their 20s are willing to spend up to 69 percent of their income on rent more than 20 percent above the national average in order to live in gateway cities, including Boston, New York, Los Angeles, celine dion ticket packages San Francisco and San Diego. Thanks to greater affordability and redevelopment celine dion ticket packages efforts like Midtown Detroit s, they have also begun looking at smaller cities, ranging from Raleigh, N.C., to Des Moines, Iowa.
The commercial real estate industry is noticing a dichotomy between property fundamentals for commercial buildings in Central Business Districts (CBDs) and those in the suburbs. For example, rent growth for multifamily projects located in CBDs has outpaced rent growth celine dion ticket packages for suburban projects by 3 percentage points, according to the CoStar Group, a Washington, D.C. based research firm. Today, occupancy at CBD-based multifamily buildings averages a full percentage point higher than in the suburbs.
Similarly, in the third quarter of 2012, average rents for office buildings in CBDs nationwide celine dion ticket packages stood at $30.10 per sq. ft. a premium of more than $10 per sq. ft. over suburban office buildings. Vacancy at CBD office properties was also lower, at 0.1 percent, compared to 0.12 percent for suburban assets.
Commercial property developers and investors have experienced the shift firsthand. During the downturn, properties in urban markets celine dion ticket packages proved more immune to recessionary forces than suburban projects because of higher celine dion ticket packages barriers to entry and more resilient celine dion ticket packages job markets, notes Ian Swiergol, managing director in the Phoenix office of Alliance Residential Co., a national apartment development, management and investment firm. Having built multifamily celine dion ticket packages complexes in both urban and suburban areas in the mid-2000s, Alliance executives celine dion ticket packages found that maintaining occupancy levels above 90 percent celine dion ticket packages at suburban projects required celine dion ticket packages offering renters anywhere from two to four months in rent concessions, equal to approximately a 33 percent discount on market rent.
At urban properties, on the other hand, only about a month and a half of concessions would suffice, limiting discounts celine dion ticket packages to 14 percent at most. As a result, today Alliance is focusing on building multifamily complexes in urban locations, with easy access celine dion ticket packages to transportation and established celine dion ticket packages office, shopping and entertainment amenities, says Swiergol. A good example is Broadstone at Camelback, celine dion ticket packages a 270-unit apartment community in Phoenix that will be located next to the Camelback Esplanade office complex, the Ritz Carlton Hotel and Biltmore Fashion Park, a 535,430-sq.-ft. mall anchored by Macy s and Saks Fifth Avenue. Alliance expects that many of the residents at Broadstone at Camelback celine dion ticket packages will be the office workers from Camelback Esplanade.
On a global basis, you are clearly celine dion ticket packages seeing significant urbanization because the cities are where the jobs and opportunities are, says Robert O Brien, vice chairman celine dion ticket packages and real estate sector leader with global consultancy firm Deloitte. I think what we are going to see here is this trend continuing for the foreseeable future, driven by the high cost of gasoline and traffic patterns. You are going to see people moving closer to their jobs, transit systems becoming even more important than they are and companies out in the suburbs looking to move closer to the cities.
Part of this shift is the result of the housing crisis, says O Brien. Previous generations, including the baby boomers, saw a house of their own as an always-appreciating investment and couldn t wait to buy a place with a yard, miles away from urban crime and pollution. But as housing values celine dion ticket packages fell 34.4 percent over the past six years from their 2006 peak, according to the S P/Case-Shiller home price index, home ownership came to look like a much riskier bet than previously thought.
Meanwhile, the echo boomers have been graduating from college carrying thousands of dollars in debt in student loans and facing limited job prospects, notes Ella Shaw Neyland, president of Steadfast Income REIT, an Irvine, Calif. based multifamily investment and management company. Jones Lang LaSalle estimates that year-to-date in 2012, home purchasing activity for people under 44 is down 60.1 percent compared to 2008. Not only can they not afford homeownership, they view renting as offering greater flexibility if they end up getting a job offer that requires relocation.
For the echo boomers, the choice to live in urban areas rather than in the far-flung suburbs also comes down to quality of life, Neyland says. She notes that her three children would rather have time during the week to indulge in activities they like than spend hours commuting to and from work and worrying about things like fixing household appliances. In many instances, renting instead of buying also results in more income left over for discretionary purchases.
Other factors have also played a role. As baby boomers get older, they no longer feel as safe and comfortable driving an hour or longer into the city for work or entertainment, notes O Brien. That s happening at the same time as the commutes to the suburbs have become plagued by endless traffic jams and as cities have been investing millions of dollars to create safe, vibrant downtown districts. As a result, many boomers celine dion ticket packages are moving to the cities celine dion ticket packages as well, after their children leave home.
Walter Page, director of research for the office sector with the CoStar Group, is a typical example. While his kids were young, Page and his wife maintained a big house in the suburbs of Chicago, and every morning he spent an hour and a half commuting to work. But after the kids went to college, the Pages moved to Cambridge, Mass., because they wanted to be in an urban environment, close to all amenities.
Major employers are taking note. In July, Motorola Mobility Inc. announced it would be moving its headquarters and 3,000 employees from Libertyville, Ill., to a 600,000-sq.-ft. office at Merchandise Mart in Downtown Chicago, representing the largest influx of new employees to the city in decades. celine dion ticket packages The move will cost Motorola an estimated $300 million.
Aircraft manufacturer Boeing Co. reclaimed space in Downtown Seattle this year, moving about 80 employees, including top executives, to Russell Investment Centers from Renton, Wash. Boeing was founded in Seattle but moved outside the city in 2001.
Even Detroit has seen an uptick in new businesses recently. In 2011, healthcare celine dion ticket packages IT company GalaxE Solutions moved about 500 employees to 1001 Woodward in the Downtown district. Last April, Chrysler ann
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