When it comes to cities for commercial real estate investment, metropolitan powerhouses like New York, San Francisco, and Chicago are usually the first to come to mind – and for good reason. New York, for example, continues to dominate the global market in terms of total investment capital with almost $80 billion in commercial transactions during the twelve months leading up to June 2015, according to real estate services firm Cushman & Wakefield.
But that doesn’t mean that these global gateway cities are the only places offering opportunities for commercial investment. All across the United States, savvy developers are shifting their sights to some pretty unlikely locales that are currently seeing huge growth in commercial real estate thanks to their prime locations and relatively low development costs.
Here are four non-traditional real estate investment markets that are likely to be at the forefront of economic growth and development over the next few years:
Jersey City, New Jersey
Sitting on the banks of the Hudson River across from Manhattan, Jersey City is the second most populous city in New Jersey – topped only by neighboring Newark. Long known as a manufacturing town littered with factories, docks, and rail yards, Jersey City is currently undergoing a drastic revitalization, especially around Journal Square.
Thanks in part to the city leadership’s recent approval of a new development plan, a plethora of new construction starts are in the works such as Kushner Real Estate Group’s three-tower mixed-use Journal Squared project, the ninety-five-story 99 Hudson Street high-rise (which is anticipated to be the tallest structure in New Jersey once it’s completed), and Mack-Cali’s 763-unit URL Harborside residential building. URL Harborside will be part of the sprawling Harborside Plaza complex which is already home to two of Mack-Cali’s three Wired Certified Platinum buildings in Jersey City.
As a major cultural hub of the southeast and the economic gateway to Latin America and beyond, Miami is no stranger to big commercial projects. But after the most recent real estate crisis, during which the city was one of the hardest hit in the nation, development all but stopped for nearly half a decade. Now, however, the city is once again becoming a mecca for serious investors and developers.
There are currently billions of dollars of developments in the works for the Magic City. The most prominent developments including Moore77’s planned 17.7-acre project in North Miami that is set to house up to 2,300 residential units and 2.5 million square feet of commercial space, and an 850,000-square-foot mixed-up development spearheaded by Neighborhood Planning Co in the primarily residential area of West Kendall on the western edge of the city. There’s also the 30-acre Miami WorldCenter which will bring an estimated 1,000 condo units, a 1,800-room hotel, and one-million square feet of retail to the Park West neighborhood right in the heart of Miami’s central business district. This mega-development will sit just blocks from local landmarks like the American Airlines Arena, the Port of Miami, and the Southeast Financial Center – a prominent 55-story, 1.15-million-square-foot office building and the City of Miami’s first Wired Certified Platinum property.
Ever since its beginnings as a prominent mill town in the mid-19th century, Minneapolis has been a major economic center. Today, a number of Fortune 500 companies including Target, U.S. Bancorp, and Ameriprise Financial call the city home. And at the current pace of development, the future is looking pretty bright for Minnesota’s capital: 2015 is the fourth year in a row in which the city has issued construction permits for projects totaling more than a billion dollars.
Among the most notable commercial real estate projects underway include Ryan Companies’ Downtown East development which will bring 1.2 million square feet of new office space to the CBD, and Xcel Energy’s 222,000-square-foot second tower for its corporate headquarters. The Mall of America, the largest retail space in the United States, is nearing the end of a 750,000-square-foot expansion which will include an extra 150,000 square feet of retail, a 342-room JW Marriott hotel, and a ten-story office tower. Last month, plans were submitted for an additional one-million-square-foot mall expansion set to get underway in early 2016.
Also under construction in downtown Minneapolis’ North Loop is the T3 Office building which is being built by real estate firm Hines. Already Wired Pre-Certified Silver by WiredScore for its connectivity, T3 will be a seven-story, 220,000-square-foot mass timber office property located right in the heart of Minnesota’s capital city. Construction on this project is slated to be finished this fall.
While the real estate market in neighboring Seattle has received plenty of attention recently thanks to a number of commercial property acquisitions by Amazon, Bellevue has remained mostly under the news outlets’ radar– but not of investors and developers. Sitting on the shore of Lake Washington, Bellevue is more than just a suburb of Seattle: it’s a thriving business center that’s consistently ranked among the nation’s most enjoyable places to live and work by publications like CNNMoney and USA Today.
Downtown Bellevue has seen an eruption of new development starts in recent history, with impressive projects underway like the 1.5 million-square-foot mixed-use Lincoln Square Expansion and Lease Crutcher Lewis’ 468,000-square-foot Nine-Two-Nine office building which is scheduled to welcome tenants in December. Other planned projects set to begin in the near future include Bosa Development’s 21-story residential and retail tower, and Fana Group’s 1.2 million square foot multi-phase residential and office development.