Real estate management company Cadre released its pick of top CRE investment markets in the US. Split into three lists—multifamily, industrial, and office—cities in the South and West took a lot of space, being a majority in each of the categories.
Three markets—Charlotte, North Carolina; Nashville, Tennessee; and Raleigh, North Carolina—appeared in all three categories.
More were on at least two of the lists: Boston, Massachusetts; Miami, Florida; San Diego, California; and Washington, D.C.
The choices were based on a combination of data-based forecasts and professional experience in the markets. That combination is often suggested by experts in data analysis, as sometimes information can seem to suggest one course of action, but a knowledge of specific dynamics, history, or other insights can sometimes spot a flaw in a formulaic adherence. Though, there are times that reliance on gut hunch over data-based warnings is a recipe for disaster in the making.
“As fundraising has spiked and property prices have appreciated in recent years, private real estate has drawn interest as an alternative investment strategy. Savvy investors will likely seek opportunities in markets with high-growth potential,” the report said. “Cadre’s MVPs place Charlotte, Raleigh, and Nashville among the top growing cities in each asset class – multifamily, industrial, and office.”
Cadre says that it looks at historical returns, projected growth two years out, and potential for liquidity in each market and then ran the lists by its investments team.
“This year, Cadre’s data has revealed a number of timely themes driving growth in U.S. markets,” the company said. “For multifamily assets, Cadre is bullish on markets with enduring job and population growth where apartment rents are priced more affordably than the price of home ownership.” That strategy would ensure the jump from renting to ownership would be difficult and lock more people into continuing to rent.
“In office, Cadre expects to focus on Southern growth markets where office utilization rates remain strong,” the report added. “Among industrial assets, Cadre is focused on essential locations that benefit supply chain needs. Ultimately, these factors – in concert with broad swaths of transaction, demographic, and fundamental data – highlight the expected top growers among U.S. markets.”
In all cases, though, cities in the South and West were heavily represented, possibly because money and markets follow people, and there have been significant shifts of businesses and people to these regions.