HOW TO CAPITALIZE ON MIGRATION TRENDS February 8, 2023 | CRE News , Investment | commercial real estate tenants , business tips , real estate trends In recent years, population shifts in the United States have led to surprising repercussions within commercial real estate. While some trends were simply accelerated due to the coronavirus pandemic, some regions have seen higher growth than anyone could have expected. Between office spaces, retail properties, and restaurants, here are a few strategies that investors should consider to capitalize on the great migration. The Pandemic’s Effect on Population Shifts According to Placer.ai , an industry leader in commercial real estate and demographic analytics, migration patterns within the United States may not have been altered as much as they seem to be based on recent news stories. The recent exodus from California to Texas and the major lull in the Northeast in favor of sunny Florida actually tracks well with what was seen prior to the pandemic. The jarring change has been the pace at which populations have been shifting. Placer reported that of new residents moving to Texas, 11.1% were from California, with a large portion moving directly to the Dallas-Fort Worth area. Overall, Texas and Florida both saw a sizable growth from the West and Northeast, with a growth of over 1.6 million new residents. Projections show that spillover from these major population centers has already resulted in secondary destination growth in cities like Mount Juliet and in Guadalupe County. A more obvious trend pulling from the pandemic, however, is the growth of small towns. While Texas and Florida have seen massive population gains throughout the past few years, Montana, Utah, and Idaho were the states that saw the most rapid proportional growth. Real estate investment analysts at PropertyClub discuss the growing trend of “Zoom Towns,” in these areas. They say that, as a result of new work-from-home trends and workers searching for more affordable living, new “destination cities” have grown in popularity, such as Boise, Idaho; Carmel, Indiana; Olathe, Kansas; and Burlington, Vermont. While some of these trends were expected to an extent, local markets are reeling at the expedited rates. To satisfy new needs and to capitalize on growing demands, new opportunities are available to the savvy investor. A New Population with New Demands The best way to target strong commercial real estate investments varies depending on region, but standard rules still apply to these new shifts. Areas seeing population growth should see higher demands in multi-family housing as well as office spaces. These demands will branch out to touch the retail and restaurant sectors as a result. These standard results shouldn’t be all that’s taken into consideration, however. Smaller towns and secondary markets are seeing considerable growth at rates that they are generally unprepared for. While larger population centers can generally handle these rapid influxes of new residents, proportional gains in smaller markets have the potential to cripple communities. Investors that target these surging smaller markets have the benefit of lower competition and potentially cost mitigation incentives from local governments. Still, investors looking to get ahead of these new residents should remember to consider where their populations are coming from to understand potential new preferences. For example, Texas’ new Californian population has brought with them their love of brands like In-N-Out and Trader Joe’s. Both brands have seen considerable growth within Texas as a result. Similar to a growing demand of senior living in Florida, demographic shifts should always be taken into account when prioritizing tenants. National Property Inspections has access to a nation-spanning network of property inspection professionals, trained on the different intricacies and demands of every type of building. Schedule your next commercial inspection with one of our experts today!