Commercial property investing - best urban markets (agent, houses, capital)
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This thread seeks to open a discussion on so-called 24-hour cities. For years, Emerging Trends in Real Estate has claimed that cities like New York, Boston, Chicago, San Francisco, and Washington DC provide better investment returns, due to their 24/7 attributes.
Questions to consider:
Is the claim about superior returns justified?
Just what are the 24-hour cities in the United States? Is the brief list above a good one?
How do you measure or identify twenty-four-hour-ness, or is this purely subjective?
I am convinced that billions have been invested on the premise that 24-hour markets are best. What's the evidence that you can meaningfully segregate 24-hour cities from all the rest?
Have fun! I'm interested in any/all points of view.
This thread seeks to open a discussion on so-called 24-hour cities. For years, Emerging Trends in Real Estate has claimed that cities like New York, Boston, Chicago, San Francisco, and Washington DC provide better investment returns, due to their 24/7 attributes.
Questions to consider:
Is the claim about superior returns justified?
Just what are the 24-hour cities in the United States? Is the brief list above a good one?
How do you measure or identify twenty-four-hour-ness, or is this purely subjective?
I am convinced that billions have been invested on the premise that 24-hour markets are best. What's the evidence that you can meaningfully segregate 24-hour cities from all the rest?
Have fun! I'm interested in any/all points of view.
Hugh
Not familiar with any of those cities besides Boston and New York but I have lived in both cities(Not NYC but the suburbs) and Boston def isn't a 24 hour city.
Thanks for kicking off the feedback, JDM... Boston's universities are often mentioned as contributing to nighttime activity, and there's wonderful residential areas right in the heart of the city. So what makes NYC different?
More generally, what sparks cities that succeed in keeping downtowns lively beyond the evening rush hour?
Boston is a place where one can live very good life and the market here is even good to explore. It is a good market area and a place of best restaurants.
Thanks for kicking off the feedback, JDM... Boston's universities are often mentioned as contributing to nighttime activity, and there's wonderful residential areas right in the heart of the city. So what makes NYC different?
More generally, what sparks cities that succeed in keeping downtowns lively beyond the evening rush hour?
I'm not sure what makes NYC different. Boston is certainely a lively place. But NYC is unique in that everything is opened all night. I do not think this is as common as you think. The universities have students staying out late but that is mostly at frat houses peoples dorms not necessarily restaurants and bars.
I don't think those cities would necessarily be better investments. It would have to be looked at building by building, like any other real estate investment (if you are buying because of trends you read about, you shouldn't be investing in RE). Buying blindly because of a "trend" is a really bad idea.
Most would not be great investments, with rates of return too low for the amount of capital to buy in. Overall those cities have high purchase prices, high property taxes and other high costs of ownership. They would have to generate very high rents to justify the investments. If they don't there is no return, just a lot of money tied up or a huge mortgage eating up all the income.
These types of cities are for only the highest income investors, not really an option for most real estate investors due to upfront costs.
Most are best off, investing in places with good returns where most people aren't noticing them. Keeps the costs in reason because they aren't being bid up on by everybody who thinks they are a investor.
Thanks for these initial comments, which are helpful points of view. James_alex's comments on restaurants are surely on target: I've never been disappointed with the wonderful selection of Boston's restaurants - in the Back Bay, in the North End, by the Seaport. Good dining-out opportunities seem key to the "evening economy" (see John Montgomery's book, "The New Wealth of Cities").
JDM's remark about NYC's uniqueness also rings true. I see a spectrum running from really round-the-clock places to those that are strictly 9-to-5 ... and placing cities along that spectrum is part of my interest. So - don't think of this as a Yes/No issue in future posts.
I am grateful for Richb's perspective as a real estate agent. Rich: I'm principally looking at commercial property in my investigations. Your rate-of-return and 'buy-in price' thoughts make a common-sense point, but it is interesting that the "Emerging Trends in Real Estate" guys think differently. Of course, they are ALL very large players. Vis-a-vis your remark about taxes and costs, I took a formal national survey of senior real estate executive in late 2010 and that's being released in "Urban Land" later this spring.
Keep the ideas coming! I'm loving it.
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