Far be it from me to second-guess Jeff Bezos, but lately I’ve been wishing that he had taken a more surprising path in selecting the sites of Amazon’s second headquarters. (What this corporate real estate decision has to do with multifamily investment will soon become clear.)
Maybe I’d have picked the dynamic duo of Pittsburgh and Kansas City. Or named, say, Detroit, Salt Lake City and New Orleans as my golden trio. Or stepped up to the microphone, uttered the words “Congratulations, Cleveland!” and basked in the stunned silence.
Having indulged in this daydream, I’ll move on to the topic at hand, which is the nexus of multifamily development and technology. Even before the initial shock waves from the HQ2 announcement on Nov. 13 started to subside, the impact on the multifamily sectors in Arlington, Va., and Queens, N.Y., was stirring up local controversy.
The debate about how much the winners and their residents will really benefit from Amazon’s massive presence will probably rage for years; still, you’d be hard-pressed to find any mid-size or large city that doesn’t want to get in on the technology boom. As Holly Dutton reports in this month’s cover story, the emergence of a metropolitan area as a tech magnet tends to boost the local multifamily market.
Comeback Cities
Among metros benefiting from the surging digital economy are some of the usual suspects. But you’ll find some surprises, as well. Take Provo, Utah, where technology employment has taken a bigger leap by percentage than even San Francisco (65 percent to 63 percent). This reminds us that a market doesn’t have to be as big as Crystal City to attract technology companies and multifamily investors.
Which cities become tomorrow’s stars depends on a variety of factors. Among them are the ingenuity of local officials and entrepreneurs, cultural and recreational resources that appeal to younger workers, and universities that foster technology incubators. Of note, the lineup of new technology hubs includes towns that are bouncing back after decades of decline. Take Pittsburgh, and, even more improbable, Detroit. As a lifelong fan of underdogs, I can’t wait to see which city is the next to write its comeback story.
In the meantime, forward-thinking multifamily investors, developers and advisers will watch for new technology hubs on the rise. Those that get in on the ground floor will stand themselves in good stead.
