Renters Most Interested in This Midwestern City

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“Inspiration exists, but it has to find you working.”

― Pablo Picasso

Employment Growth Slows in Interest Rate Sensitive Job Sectors link

• High-wage sectors like Information, Professional and Business Services, and Financial Activities are experiencing a slowdown in employment growth due to interest rate pressures. This indicates a rolling recession in these sectors.

• Education, Health Services, and Government sectors are still seeing robust job growth. These sectors are less affected by interest rate changes.

• Construction and Leisure and Hospitality Services are sectors to watch. Construction might ease soon, while Leisure and Hospitality growth may slow as pandemic-era savings deplete.

Where rents are rising link

• Rental prices are increasing significantly in several cities, particularly those with strong job markets and limited housing supply. Cities like Miami, Tampa, and Phoenix are experiencing some of the highest rent hikes.

• The national average rent rose by 5.2% year-over-year, indicating a strong upward trend. This contrasts with a slower growth rate in previous years.

• Major tech hubs are also seeing sharp increases, with rents in Austin and San Francisco climbing rapidly. These areas are attracting more remote workers and tech professionals.

Private deals for mansions, art, and cars surge among the ultra-rich link

• There's a notable increase in private sales of luxury assets like mansions, art, and cars among the ultra-rich. These transactions often go unnoticed by the public and highlight the discreet nature of wealth transfer in high-end markets.

• High-net-worth individuals are investing heavily in tangible assets as a hedge against economic uncertainty. The market for collectible cars and rare artworks has seen substantial growth.

• Cities like New York, Los Angeles, and Miami are key hotspots for these private deals. The demand for exclusive, high-value properties and collectibles is driving prices to new heights.

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Retailers Look for Success in Secondary and Tertiary Markets link

• Retailers are expanding into secondary and tertiary markets to find lower rents and more development space. This move helps avoid oversaturation and competition in primary urban markets.

• These outer markets provide a new customer base and cost advantages, making them attractive for retail growth. Retailers are strategically choosing locations to maximize economic benefits.

• CBRE notes that this trend mirrors shifts seen in multifamily and medical office sectors. Secondary markets are becoming key areas for retail expansion due to their favorable conditions.

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Chicago Industrial Market Outshines the Rest of the Midwest link

• Chicago's industrial market led the Midwest with $435.2 million in sales in the first two months of 2024, with 50 properties totaling 6.4 million square feet. This marked a significant increase from $111.2 million in the same period last year.

• The city has the largest under-construction pipeline in the Midwest, with 11.4 million square feet of industrial space across 32 properties. This represents 1.1% of the total stock, slightly below the national average of 2%.

• Vacancy rates in Chicago were 5.2% as of February, higher than the national average of 5%. Despite this, the average asking rent was $6.00 per square foot, lower than the national average of $7.68.

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Renters Most Interested in This Midwestern City 

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That's all, folks.

Cheers,

Vidit

P.S - Read past newsletters here