Understanding the Re-urbanization Movement’s Impact on CRE


An important trend for commercial real estate professionals is being called re-urbanization. As the name implies, this is a return to city centers and less growth in suburban areas. It’s been gaining momentum for the past several years, and is driven by a variety of economic and social factors. It has some noteworthy implications for commercial real estate and how we do business.

A 2014 study released by Rutgers discusses the extent of this trend as well as the factors that have contributed to it. For about 30 years following World War 2, the U.S. population shifted, with more people preferring to live –and often also work- outside of the urban core. Longer commutes became the norm; single-family homes the ideal. City centers began to lose population, while suburban development proceeded apace.

Enter the millennial generation. Priorities for this demographic make living and working in the city center a perfect fit. This age group shows a preference for the convenience of renting as opposed to home ownership. They are interested in access to amenities that can be found in mixed-use urban areas –recreation, museums, dining, and entertainment.  They’re interested in sustainability, so a short or non-existent commute makes sense to them, ethically and economically. The economic downturn and, in many cases, burdensome student loans contribute to this attitude. All of these factors have prompted millennials to lead the “post-suburban demographic.” Another major group making switch to city living is retiring Baby Boomers. They are also looking to enjoy the amenities of the city without spending a lot on fuel and spending time driving into town. Proximity to top medical facilities, culture, and retail outlets are also a consideration.

Acknowledging the significance of this shift in population and the return to city centers, what are the implications for the commercial real estate industry?  There are many opportunities here, particularly with regard to residential redevelopment and increased retail activity.

As more people look to make their home in city centers, commercial real estate can find ways to adapt existing properties. This can involve residential buildings as well as underutilized properties built for other purposes. This often works hand in hand with the city government’s goals to revitalize neglected areas, so they are eager to work with developers. Creating livable urban neighborhoods is a win for everyone.

An important part of the desirable, mixed-use neighborhood is retail. More residents draw business –from dining and shopping to services. Re-urbanization is creating a lot of activity in retail spaces, as well as improvements in infrastructure that draw still more people.  With enthusiastic support from local government, we have to keep our heads to avoid over-development and market saturation.

The only way to make sound business decisions is from a point of knowledge. Gathering and analyzing information rather than relying on hunches or guesswork just make sense. Understanding traffic patterns at a property, both vehicle and pedestrian, provides key insights that drive sound decisions in this urban environment. Being able to share this information with clients and partners clarifies your position and keeps everyone in the loop. Using a platform like Motionloft hands you this powerful tool in an immediately usable form and keeps you informed around the clock.

So by all means, check into the opportunities for commercial real estate in urban centers. But rely on your own customized Motionloft data when it comes to the critical decisions you’ll face.




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