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When a city’s startup scene begins to take shape and thrive, it’s commercial real estate market is always right on its tail. As Richard Sarkis explains in his article “Rapid Startup Growth in These 4 Cities Has Led to Big Changes in Commercial Real Estate” for entrepreneur.com, this type of growth isn’t reserved solely for larger cities who are already experiencing robust growth in this area, such as Seattle, Austin, San Diego, etc., but in four other cities as well — cities that investors may want to be keeping a close eye on in the next few months.
Charlotte may be a very attractive market for CRE developers looking to build customized assets from the ground up. It has jumped three spots to no. 17 in Kauffman’s 2017 Startup Activity Index. This jump correlates with the boost seen in its median sales price for commercial properties within city limits and for sales of vacant lots zoned for commercial uses.
Cleveland, having jumped nine spots on the same index as Charlotte, has seen multifamily residential properties become particularly popular with total sales growing over 60% in between 2013 and 2017. Thanks to startups like ViewRay and MacroPoint, the city’s tech sector has also turned a corner with an massive job growth of 84.3% in 2017.
Reno, Nevada, the famed “Biggest Little City in the World,” may have to change its nickname here in the near future with total commercial sales increasing nearly 50% since 2015, and total sales of hospitality properties jumping 125% between 2013 and 2017. And it’s not just gambling and entertainment investments leading the way; Tesla and Panasonic have opened campuses there in recent years, leading to growth in the city’s multifamily residential market.
And finally, on the Kansas side of the city, Kansas City has seen significant growth in commercial and vacant lot sales, much of which has been driven by investment from major telecom players like Sprint, which in 2013 launched the Kansas City-based Sprint Mobile Health Accelerator to help out local entrepreneurs with funding and expertise.
Commercial real estate investments can be a tricky game, but according to Sarkis, if one is looking to play, these four cities would be a good place to start.