It’s Oscar season but we’re not thinking much about this year’s movie nominees. At Streitwise, we’re staying entertained by observing the results of CBRE’s 2020 migration study: “COVID-19 Impact on Resident Migration Patterns”. Turns out the headlines about urban city dwellers moving to more cost-efficient suburbs were largely on point. But now the abundant anecdotal evidence can be matched with more concrete data compiled in CBRE’s Migration Report.
The biggest losers were mostly primary urban cities, especially those with heavy tech exposure:
- San Francisco
- New York
- Los Angeles
- Washington D.C.
The largest cohort of the urban outflow was well-educated, young professionals, most of whom can work remotely. The flight from major cities reflects an environment where young adults can plan to have families in larger living spaces and more cost-efficiently. In our own experience, we also know they are targeting suburbs that are dense enough to support local amenities that were previously satisfied within the urban cores.
While many who left their urban abodes will return once the pandemic subsides, a considerable percentage probably won’t. This sudden shift effectively pulls forward a trend that was already in motion prior to the pandemic, further supporting Streitwise’s thesis of investing in suburban-urban areas where employees will continue to be drawn to affordable neighborhoods with abundant retail/communal amenities and space to raise a family.
Our recent leasing momentum in the midst of a global pandemic – including signing Truist Bank to a 7-year lease at a building-high rent in Indianapolis – is proof positive that our portfolio is positioned to benefit from these long term tailwinds for years to come.
Eliot Bencuya is the co-founder and CEO of Streitwise. Eliot has extensive experience identifying, underwriting, and executing value-add real estate investments.
Prior to forming Streitwise, he was a Vice President of Acquisitions for Canyon Capital Realty Advisors and the Canyon-Johnson Urban Funds, where he was responsible for originating, underwriting, structuring and executing transactions in the Pacific Northwest, Northern California and Midwest regions. Mr. Bencuya also held positions at Sovereign Investment Company (a subsidiary of the Marcus and Millichap Company) and the investment banking division of Merrill Lynch & Co. He holds a Bachelor of Arts degree in Economics and International Studies from Yale University, and a Masters of Business Administration degree from the Haas School of Business at the University of California, Berkeley. Mr. Bencuya is a member of ULI.