The Rise of the 18-hour City
While 24-hour cities still attract residents and real estate companies, slightly quieter 18-hour cities are gaining appeal.
Cities that never sleep tend to exist in a real estate bubble. Las Vegas and New York will always attract fresh residents, for example.
But a new type of town is generating buzz in the real estate industry. While 24-hour cities are still appealing, real estate investors are increasingly turning to slightly quieter but still-hip “18-hour cities,” according to a joint ULI and PWC report called Emerging Trends in Real Estate.
These cities make the world of attractive markets – both for residents and the real estate industry – significantly bigger.
The report identifies Austin, Denver, San Diego, San Antonio and Nashville as key 18-hour cities. Real estate companies see tremendous potential in these cities, and Southern Land Company is no exception – we are building our 4000 Hillsboro project in Nashville, which will be ready in early 2018, and our 18th and Central project in Denver, which will be complete next year.
In part, these markets are growing as the overall economy improves. But, the report adds, “The development and application of technology make it possible for these markets to offer the benefits of a larger urban area at a significantly lower cost.” They are also, as the report calls them, “cool.”
In other words, each of these 18-hour cities offers a unique culture, great amenities and a high quality of life at a lower cost than 24-hour cities. They’re also a relatively safe bet for investors:
“During the current economic expansion, the capital markets have demonstrated a much greater degree of restraint when it comes to funding new development,” the ULI report says. “So the 18-hour cities face lower-than-average supply pressure, compared with history. Investors, meanwhile, have become more sophisticated.”
Over the next several years, the report continues, “this trend should intensify. More capital is available than a handful of 24-hour markets can absorb.”
This is good news for the industry, growing cities and residents who want to live in cities full of energy and activities, but that do, occasionally, sleep.