Mid-Sized Cities, Large-Sized (Potential) Profits - 9 Hot Real Estate Markets

March 9, 2016

Savvy real estate investors know to look beyond large cities for intriguing investment options.

 

 

Provo_Downtown_Historic_District

 

Many commercial real estate investment opportunities can be found in medium-size cities (which for the purposes of this article, we’ll definite as cities with populations between 100,000 and 500,000), especially in areas with strong job growth. Here is our list of nine high-job growth cities that have great potential for real estate investors in 2016:

  1. Provo, Utah. Provo is the home of Brigham Young University and the third largest city in Utah. Provo has 219,700 jobs and a growth rate of 5.4 percent. If anything, things have improved for 2016 and beyond, thanks to the development of master plans for various neighborhoods, including the Downtown. Five planning districts are in the Downtown plan, and 16 acres are slated for redevelopment. Plans call for:
    1. Relocation of the Provo City Center.
    2. Converting the current City Center property into a Central Arts and Entertainment District.
    3. Developing a new downtown hotel.
    4. Increasing the number of downtown residential units.
    5. Building more open spaces and parks downtown.
    6. Private development of attractive, and often contiguous, parcels of land that are vacant, undervalued or under-utilized, spurred by efforts of the Vacant Redevelopment Agency.
    7. Freeway-oriented commercial zoning along Interstate 15.
    8. Establishment of new high-density housing, retail areas, neighborhood connectivity and mixed-use development.
  2. Cape Coral, Florida. Cape Coral and neighboring Fort Myers are known as a “Waterfront Wonderland,” boasting more than 400 miles of navigable waters. As of 2014, Cape Coral-Fort Myers had 219,100 jobs and a growth rate of 5.2 percent. The Cape Coral Economic Development Office emphasizes development in five key sectors:
    1. Health Care: Projects include expansion of Cape Coral Hospital, a new VA Health Care Center, and private companies to service the booming population, such as medical offices, diagnostic and testing labs, health-related data processing, and professional support offices.
    2. Light Industry: Friendly zoning for a number of sectors, including electronics, IT, solar, pharmaceuticals, engineering, optical, furniture and apparel.
    3. Corporate Office: Demand spurred by growing, well-educated labor market, available space, low cost of living, established business community (banks, financial services, higher education) and a business-friendly environment
    4. Back Office: including marketing, medical billing, customer service, IT research/sales, payroll/financing, and insurance processing.
    5. Wholesale/Distributor: Currently home to 300 distributors/wholesalers and two Foreign-Trade-Zone industrial parks.
  3. Fayetteville-Springdale-Rogers Arkansas. This tri-city area has 227,800 jobs and a 4.3 percent growth rate. Publications such as Forbes and Inc. Magazine have given the area high marks for business and careers. The area is home to the University of Arkansas, Tyson Foods, and several large shopping malls. Fayetteville has adopted a number of master plans, including ones for the Downtown, Walker Park, Fayette Junction and Wedington Corridor, as well as several overlay and special districts. The Corridor encompasses a 5-lane state arterial and commercial lots fronting Wedington Drive. The Corridor Plan aims to unify development of commercial property, including apartments, markets, restaurants and retail.
  4. North Port-Sarasota-Bradenton, Florida. This area lies on the west central coast of Florida. It has 276,700 jobs and a job growth rate of 4.4 percent. The Sarasota Strategic Plan calls for redevelopment of the Downtown, including the Rosemary Catalyst Project encompassing a site for 40 residences, a town-square, commercial/office space and structured parking. The North Port Strategic Plan calls for new shopping centers and factories, citing affordability and location within the Southwest Florida Growth Corridor. Bradenton boasts of its Gulf location, business incentives, large consumer market, low taxes, large workforce, excellent infrastructure and enjoyable lifestyle.
  5. Savannah

    Savannah, Georgia. The country’s oldest city is also one of its fastest growing. This industrial center has 168,100 jobs and a job growth rate of 4.9 percent, and bills itself as the “Wall Street of the South.”  The Savannah Economic Development Authority’s (SEDA) 2016 Business Plan calls for designating the Savannah World Trade Center for investment as a regional center. SEDA is actively attracting businesses in a number of emerging industries, including game development, entertainment, technology. In 2015, Savannah saw capital investments exceeding $204 million and 76 new projects.
  6. Bakersfield, California. The 9th largest city in California is the seat of Kern County. Bakersfield has 261,700 jobs and a 3.3 percent job growth rate. The primary industries are oil and agriculture.The county’s industrial vacancy rate is only 2.8 percent, with massive new distribution centers going up in Paramount Logistics Park, and a new outlet mall in Tejon Ranch. The overall vacancy rate for offices is shrinking and average rents are rising. Bakersfield is the largest California city with the lowest sales tax, and the home of the world’s largest ice cream plant. The Kern Economic Development Corporation lists the area’s target industries as:
    1. Transportation, Logistics & Advanced Manufacturing.
    2. Energy & Natural Resources.
    3. Value-Added Agriculture.
    4. Healthcare Services.
    5. Aerospace & Defense.
  7. Ogden-Clearfield, Utah. Ogden is a freight rail hub, making it convenient for commerce and manufacturing. The area has 234,700 jobs and a job growth rate of 3.5 percent. Clearfield is a popular suburb and home to a number of large employers, including Hill Air Force Base, Alliant Techsystems, Utility Trailer Manufacturing Company and Lifetime Products. The Freeport Center is a warehousing, manufacturing and distribution center, home to 70+ companies employing 7,000+ people. Legend Hills is a large office development off of I-15. Ogden is headquarters to America First Credit Union, Autoliv, FJ Management and Kadince Software. The Ogden Redevelopment Agency offers unique tax increment financing to incentivize developers based on anticipated tax revenue growth.
  8. Charleston-North Charleston, South Carolina. This historic area is centered on Charleston Harbor just off the Atlantic coast. Perennially singled out for its mannerly lifestyle, preserved architecture and fine restaurants, the area has 324,300 jobs and a 2.9 percent growth rate. Charleston is a major tourist destination with high quality shopping and dining. The city has two shipping terminals and is a prime location for IT companies and jobs. Prominent companies include SPARC, Blackbaud, BoomTown, Benefitfocus and CSS. Residential prices are among the highest in the country, with the average home price exceeding $420,000. The Charleston County Economic Development Department claims a number of strategic advantages for the area, including:
    1. Superior transportation logistics.
    2. Pro-business environment.
    3. A record of success.
    4. Top-quality lifestyle.
    5. Centrally located business properties, including industrial parks, suburban office parks and undeveloped commercial parkways
  9. Greenville-Anderson-Mauldin, South Carolina. This area has 394,400 jobs and a job growth rate of 2.4 percent. Favorable tax benefits and wages have encouraged an influx of foreign investments, and Greenville is the North American headquarters for Michelin, CertusBank, AVX Corporation and Scansource. The area is a hub for R&D activity, especially in the automotive industry. Facilities operated by Honeywell, 3M, Caterpillar and General Electric are located in the Greenville area. Anderson hosts 22 international companies and more than 230 manufacturers in fields as diverse as textiles, publishing, plastics, industrial machinery, metal products and automobile products.

We hope this gives you some idea of the potential for property investing in mid-sized cities. We offer the best investments by the leading development companies all over the country, enabling you to develop a diversified real estate portfolio.

 

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