Commercial real estate is a hot topic for investors, with plenty of opportunity for making money when done correctly. But when an investor makes a poor choice or selects the wrong market, the financial problems that come with that can be very serious. Rather than take that risk, an investor will want to study the market and know which locations are going to be the best and most viable for commercial real estate investment. Oftentimes it is a city that is popular and bustling, but it may not be that entire city. It could be just a portion of it, or one neighborhood where things are particularly fruitful. The following markets have a combination of improving real estate markets and desirable features/amenities. To be sure, the value of private new office construction in the United States totaled an impressive 6.6 billion U.S. dollars in the first half of 2017. And it is a market that shows no signs of slowing down. In 2016, approximately $74.24 billion worth of commercial buildings were developed in the United States, and the number of employees in this sector is projected to increase with time.
Charlotte – South End
The South End neighborhood in Charlotte is home to an up and coming collection of businesses that offer a number of great amenities to the people of that city. But not a lot of companies reside there yet. Because of that, investors can still get a great deal on properties in the South End, which was reborn in the 1990s and reinvented from its creation in the 1850s. Located just south of Uptown Charlotte, the neighborhood offers properties from lower prices all the way up to more expensive choices. The majority of the economic and population growth in the Carolinas is concentrated in metropolitan areas, notably Charlotte and Raleigh. However, this doesn’t mean that it’s time to write the obituary for other areas of the state. Mid-size markets, such as Greensboro and Winston-Salem, are also enjoying commercial real estate success. This bodes well for investors who want to cast a wider net for North Carolina. Worth noting, banks are tightening up on their underwriting in commercial real estate lending, so the time to leap may be now.
Cleveland – Warehouse District
Not everyone thinks of Cleveland when they think of hot commercial real estate markets, but the Warehouse District is a good choice for anyone who wants a convenient location that is steadily being developed to be more in line with what residents in the city are looking for. Containing everything from coffee shops and a gourmet ice cream parlor to a Lebanese Grill, this district is one of the main places in the city where businesses are continuing to congregate and develop a more eclectic mix of options for patrons to enjoy. Downtown Cleveland has experienced rapid population growth despite stagnation at the metro level. Developers have taken note. Even as they have built a remarkable 4,000 residential units in the downtown area, 90 percent of those spaces are occupied. Millennials comprise much of this population, driving an increase in business attraction and retention. In 2016, more than 70 office tenants made commitments to the downtown Cleveland corridor, with companies such as KeyCorp and Sherwin-Williams hiring the largest bulk of employees.
Minneapolis – North Loop & Warehouse District
For any investors who like cold weather, Minneapolis is an excellent choice for development. The North Loop & Warehouse District are up and coming locations that provide plenty of choices for both investment and business dealings. With both of these locations as good options, the city is well positioned to continue to develop from a commercial standpoint. The start-up vibe of the North Loop & Warehouse District is vibrant and hip, with everything from coffee shops to nightclubs in 111 acres of converted warehouses. Of retail, industrial, and office market real estate, industrial leads the way with low vacancy rates throughout Minneapolis a plentiful construction volume.
Denver – RiNo Arts District
An arts district is a great place for a commercial venture, because there is more to see than just buildings where people sell their wares. There is also the artistic aspect of it, which can bring people to the area even if they are not necessarily looking to buy something. That helps businesses grow. This is a top 10 district to visit according to Lonely Planet, and one that will continue moving forward from an artistic standpoint as well as a commercial one.
Ongoing job and population gains in the Denver area continue to usher in a thriving industrial and office real estate market. Even the retail spaces, which have undergone tremendous pressure due to big-box store vacancies, are experiencing relief as 2017 comes to a close. Industrial remains the strongest area of the three major commercial real estate segments in metro Denver. For an unprecedented 29th consecutive quarter, businesses have occupied more space than they have let go of throughout Denver.
Los Angeles – Downtown Arts District
The city of Los Angeles is a thriving hub of commercial development in many areas, but this level of creation is new to the Downtown Arts District. There, many rundown or unused building used to dot the landscape. Now more is going on, and there are companies moving into and out of the area in a flow that is more expected for a large city location. A gritty area full of old, industrial buildings, the LA downtown art district is an eclectic mix that everyone can enjoy. The Los Angeles Basin plays host to the largest industrial base in the nation, taking up over 1.56 billion square feet in buildings larger than 10,000 square feet.
Miami – Wynwood/Midtown/Design District
In Miami, the Wynwood/Midtown/Design District is a flowing area of commercial involvement, and it is only getting hotter with time. More and more people are moving into nearby areas, and they want commercial development close to home. It is a great place for a business to move in and give nearby homeowners the kinds of companies they are looking for. Coffee shops, fashion nights, bookstores, clothing shops, and much, much more offer plenty for people to enjoy in the Wynwood/Midtown/Design District, keeping investors and businesses both interested. As of the third quarter in 2017, more than 3.3 million square feet in new supply have trickled into the Miami-Dade industrial market. Vacancy rates have plateaued at a ten-year low of 3.6 percent as well.
Pittsburgh – Strip District
The Strip District in Pittsburgh is one of the best areas of the country for commercial investing and development. It is growing rapidly, but there are still many good deals to be found there. That makes it a place where there is a good balance between well-priced options and enough traffic to be good for businesses. At 390 acres, the Strip District is one of the best areas of Pittsburgh for companies and investors that are wanting to get into the area and be on the ground floor of something great. There are a variety of industries that prompt tremendous growth in the Pittsburgh area, including resource extraction, engineering, pipeline construction, and robotics, among others. Investment by global brands, such as Ford and Uber, has also helped propel this expansion, as have an influx of Millennials.
Portland – Close In Eastside
The Eastside of Portland is a growing metropolitan area, and one where more and more commercial development is taking place because people see that there is plenty of space there along with options for large and small buildings of many different types. The are used to be primarily industrial, but the close in Eastside is now a mix of industrial and commercial building options, with plenty for people who live and work in the area to enjoy. Vacancy rates throughout Portland are at an all-time low, vacillating between 3.5 percent and 3.9 percent. With over 2.11 million square feet of space in various stages of construction, development activity is thriving.
As these kinds of areas continue to grow and develop, they will change and they may become even more valuable. With that taking place, investors will have a harder time getting into these markets in the future. Getting in now, instead, can be the right opportunity for anyone who is looking for the hottest real estate markets in the US today.
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