Urban Retail Properties News
Benefits of Urban Investments
There are many emerging factors which make
investment in urban areas more appealing. The long term rise in oil prices
along with increased traffic and congestion has translated into a rising desire
for proximity to public transit, which has made urban living more desirable. To
illustrate this fact, suburban households typically spend 25% of their budgets
on transportation, compared to 9% for urban households. Subsequently, the
number of households desiring to be within one-half mile of urban transit is expected
to double, reaching 14.8 million by 2025.
Besides concerns about transportation, other factors
are also making urban investment more appealing. The younger generation, so
called "echo-boomers" or "Generation Y" is 50% more likely
to live in urban areas. It has also been recorded that the top 100 MSAs
(Metropolitan Statistical Areas) generate 75% of the U.S. GDP and 66% of its
jobs, while only making up 12% of its land mass. Furthermore, the top 10 MSAs
are home to 33% of the nations "knowledge jobs" and 27% of its
research universities. In an economy which is increasingly based on technology
and is in-fact referred to as the "knowledge economy", these numbers
point to increased viability and prosperity for urban areas.
Lastly, the retrofit-ability (or reusability) of a
particular urban property is typically much greater than standard suburban real
estate. Urban properties usually require less identity-driven structures and
tenants are comfortable in a specific space mainly because its location. Therefore,
if a new tenant is ever needed to fill a specific property, the options of that
tenant are much larger than a specifically designed building for the previous
occupant.
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