The resurgence of downtowns

east bankby Dan Rafter

Downtowns matter, more than ever.

That’s the message from commercial real estate pros working in cities across the Midwest.

Consider Columbus. Richard Schuen, chief executive officer and principal with Colliers International in this Ohio city, says that Columbus’ downtown is a key factor in the city’s strength today.

“There has been a resurgence of our downtown,” Schuen said. “A big part of that is having people come down here and live. I’m sure you are seeing that throughout the Midwest. We are not a Chicago by any means with our downtown urban living, but people do want to live in apartments in our downtown.”

This has an impact. Retailers want to be near all these new downtown residents, so they’re setting up shop throughout the Central Business District and the neighborhoods connected to it. At the same time, developers are rushing to add to the multi-family stock in downtown neighborhoods and companies — often start-ups and tech firms — are looking for space for their businesses. If they want to attract young talent, these companies have to locate where that talent lives.

“A lot of office workers used to go the suburbs five, 10 years ago,” Schuen said. “Now a lot of the office workers want to come back to the downtown. Companies are locating their offces downtown, going into creative and funky spaces.”

Columbus isn’t alone. The U.S. Census Bureau reports that in 2013 2.3 million more people lived in metropolitan areas than in 2012. In all, 269.9 million people were living cities and their immediate surrounding areas.

The Census Bureau also reported that in 2012 and 2013 just 92 of the country’s 381 metropolitan areas lost population.

The trend is the same in St. Louis. Mike Hanrahan, managing director and principal for the St. Louis office of Cassidy Turley, says that people want to live in the heart of the city. Because of that, the multi-family sector is especially hot in downtown St. Louis and its surrounding neighborhoods, he said.

St. Louis’ downtown is helped, too, by the steady nature of the city as a whole, Hanrahan said.

“We have such a diversified economy here in St. Louis,” Hanrahan said. “That helps us. We don’t have the big ups adn downs, either, when it comes to the commercial real estate market. We tend to be a steadier market. St. Louis is a great place to get solid cash-flow returns. That stability has protected us.”

Then there’s Cleveland. That city is in the middle of rejuvenating its once dying downtown. A new casino, convention center and medical mart have brought people to the heart of the city. And now Cumberland Development and Trammel Crow — operating as a joint entity known as Cumberland Lakefront, LLC — are teaming up to develop more than 20 acres of lakefront near Cleveland’s Central Business District.

People are moving back into downtown Cleveland. And that’s good news for the city.

Geoff Coyle, managing partner with Cleveland-based Ostendorf-Morris, said that the influx of new residents moving into downtown has inspired developers to plan new apartment buildings in the heart of the city. Many are converting downtown office buildings — which had been mostly empty — into apartments.

“That really helps get rid of the vacant space,” Coyle said. “It tightens that office market up and it’s bringing young people, 30-somethings, not only into Northeast Ohio but to the Cleveland CBD. They want to live, work and play here. That’s bringing energy and excitement to the CBD.”

The resurgence in downtowns is good for the commercial real estate market. Central Business Districts grow stronger when more people live in them. And the good news for cities? As they continue to add more amenities, and more retailers and multi-family developers take note, Central Business Districts should only get stronger.

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This entry was posted in Cleveland commercial real estate, Columbus real estate, Missouri commercial real estate, multi-family, office, Ohio commercial real estate, retail, St. Louis real estate and tagged , , , , , . Bookmark the permalink.

One Response to The resurgence of downtowns

  1. Pingback: Central Business Districts (Downtowns)

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