Health Crisis Shines New Light on Market Migration, Signaling Potential Changes for Commercial Real Estate
Businesses and consumers find benefits outside gateway cities.
Over the past 20 years, population growth among secondary and tertiary markets has outpaced that of the country’s large primary metros. This trend may accelerate going forward as the global health crisis prompts residents of densely packed, high-cost urban hubs to consider the financial and lifestyle advantages of moving to smaller cities. Many companies are doing the same, seeking to diversify their workforces and reduce overhead by entering new areas. The economic downturn instigated by the pandemic may motivate more firms to shift a greater share of operations to lower-cost markets that provide flexibility in how space is utilized. These dynamics have the potential to substantially influence commercial real estate demand, from both tenants and investors, in the years ahead.