"Historically, U.S. workers have followed the jobs, but we're now seeing a dramatic shift in business practices," said NAI Global President & Chief Executive Officer Jeffrey M. Finn. "For the first time in recent history, companies are actively looking to relocate to cities and geographies where workers want to be, and that is driving commercial and residential real estate growth in the Southwestern United States. Good weather is one of the biggest reasons, as young professionals escape from colder, rainier climates in the Eastern United States."
NAI Global's new research report, entitled "U.S. Market Spotlight: Sunshine Brightens Outlook for Southwest U.S.," explores the factors driving growth in this dynamic region and highlights the opportunities and challenges this growth is likely to create. The report is authored by Dr. Peter Linneman, Chief Economist for NAI Global and professor of real estate at The Wharton School, University of Pennsylvania. The report also provides market overviews for the Southwestern cities and metropolitan areas most likely to benefit from favorable demographic trends and attractive quality of life offerings.
Denver - Increasing profits continue to drive commercial real estate leasing and investment. The completion of a new rail system serving downtown districts, as well as increases in employment, contributed to strong performance in 2006.
Los Angeles - Long Beach - Santa Ana: In addition to its thriving entertainment, aerospace, technology, fashion and tourism industries, Los Angeles is the largest manufacturing center in the United States. It is estimated that the area will add 100,000 jobs between 2007 and 2009.
San Diego - Carlsbad - San Marcos: Home to dozens of military institutions, biotechnology, and computer sciences companies, approximately 65% of San Diego's population is between the ages of 18 and 65. The diversity of the local economy and low unemployment has supported demand for office space and new construction activity.
Las Vegas - Paradise Metropolitan Area: Though high construction costs and land prices are slowing development, the commercial real estate market is expected to continue to flourish. The hotel market, in particular, continues to thrive, with roughly $28.3 billion in expansion expected through 2010.
Dallas-Fort Worth Metropolitan Area: The job base continues to grow. At the geographical center of five oil-abundant regions, Dallas is the headquarters to some of the world's largest companies, including ExxonMobil, 7 Eleven, Frito Lay and Texas Instruments.
Houston Metropolitan Area - Known for its energy industry, the city is actually one of the most economically diverse in the region. The many biomedical, aerospace, petrochemical, engineering, and banking and financial services companies located in Houston support a growing local economy. The city is second only to New York City in Fortune 500 headquarters.
Phoenix Metropolitan Area - Over the past two decades, the local economy has rapidly diversified. In recent years, a large number of high-tech and telecommunications companies have relocated to the area. Phoenix also benefits from seasonal tourism stemming from its large golf industry and warm winters.
