by Dan Rafter
The Midwest is fortunate to be home to several cities that are in the middle of commercial real estate booms.
But five metropolitan areas area poised to have particularly big 2016s. A combination of low unemployment rates, a boom in spec construction, demand for downtown living and skilled work forces make these five markets ones to watch in 2016.
Detroit: A lot of people wrote Detroit off when the city declared bankruptcy. But since the city made that move, investment dollars have again begun flowing into Detroit.
Today, plenty of young adults are moving into downtown Detroit. And Dan Gilbert of Quicken Loans has spent big money to help boost the city’s CBD.
Detroit still has a long way to go, but 2016 looks to be a busy one for the city’s downtown core.
Cleveland: It wasn’t too long ago that Cleveland’s downtown resembled a ghost town. Empty office buildings and abandoned retail storefronts littered the area.
That has changed. Today, thanks to a booming new convention center and casino, downtown Cleveland is actually hot. As with Detroit, young people are moving into apartment complexes, and developers are adding new multifamily units. New office space is also coming to downtown, the first time that’s happened in decades.
Indianapolis: Indianapolis’ downtown core has long been strong. But what’s really booming in this city is the industrial market.
The industrial market across the Midwest is second in sizzle only to the area’s multifamily sector. And industrial is especially hot in the Indianapolis market. Credit the area’s central location, it’s educated and skilled labor force, a pro-business government and low entry costs.
The best news for Indianapolis? The large number of spec industrial projects hitting the area. Developers are confident that they’ll fill the large spaces they are building. That bodes well for the future of this city.
Louisville: The Louisville market is another that is seeing an industrial boom. And much of the boom here, as in Indianapolis, involves spec construction.
Again, developers in this Kentucky city aren’t worried that they’ll struggle to find tenants to fill all the new industrial space they are developing. Why? The demand here is that strong.
Minneapolis: The Minneapolis/St. Paul area has long ranked as one of the hottest of the Midwest’s commercial real estate market. That won’t change in 2016.
The big reason? Downtown.
Young adults continue to move to downtown Minneapolis, gobbling up all the modern apartment buildings that developers have built. Expect the pace of new multifamily construction to slow a bit here in 2016, but there are still plenty of new apartment units slated for opening.
With these new apartment units has come a steady stream of retailers and trendy restaurants. And the Downtown East mixed-use project, which includes the new Minneapolis Vikings stadium, is adding even more energy to this already booming metropolis.