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Tech Hubs Draw Fewer Out-Of-Town Renters While ‘Peripheral’ Markets Get More Attention

Tech Hubs Draw Fewer Out-Of-Town Renters While ‘Peripheral’ Markets Get More Attention

Yet another report on shifts in renter preferences across America’s vast housing market (where roughly half of Americans are still renters) is showing…

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Tech Hubs Draw Fewer Out-Of-Town Renters While 'Peripheral' Markets Get More Attention

Yet another report on shifts in renter preferences across America's vast housing market (where roughly half of Americans are still renters) is showing once again that renters continue to abandon over-priced "hubs" like San Francisco and Seattle while the number of out-of-towners moving to "peripheral" markets like Sacramento, Richmond and Raleigh is on the rise.

Stock photo: Richmond VA.

According to Apartment List, the ongoing pandemic has forced many renters to rethink their situation, as increasing shifts to remote work, and other disruptions some related to the pandemic, others not, change the landscape for remote work.

Of the 50 largest metros, 37 saw a YoY decline in relative inbound migration, while 26 of the 50 largest saw a YoY decline in relative outbound migration. Meanwhile, for both inbound and outbound shifts, the largest declines occurred in the places where the level of the given metric was highest in 2019. For example, from April through August of last year, the San Francisco metro area saw the second-highest relative inbound migration rate. But ever since, it has experienced the largest decrease in that share.

As a result, many of the hot markets that had been attracting significant interest from out-of-towners have cooled, while some less-popular destinations are now attracting more inbound interest. Because of this, San Francisco has seen the nation’s fastest decline in rents since the start of the pandemic, with prices down by 3.3% from March through July. Although San Francisco remains the nation’s most expensive rental market, local renters are likely finding better deals now than they have in some time, which may encourage them to stick around.

As inbound interest to San Francisco cools, another NorCal metro has seen inbound interest increase: Sacramento. In 2020, relative inbound migration to Sacramento increased by 3.8% compared to last year; this is the second largest increase among the nation’s 50 largest metros. San Francisco is the most popular source of inbound searches to Sacramento, and this migration flow has strengthened from 2019 to 2020. As more flexible working arrangements gain popularity, affordable metros on the peripheries of major job centers may become increasingly attractive, and Sacramento appears to be showing early signs of this trend.

A similar dynamic appears to be at play in a few of other major metros that renters consider more-affordable alternatives to some of the nation’s most expensive markets. Richmond, VA, which sits about 100 miles south of Washington, DC saw relative inbound migration increase from 31.4% last year to 34.6% this year.

However, this trend isn't universal - some tech hubs are still seeing intense interest from out-of-towners. For example, Boston saw the biggest increase in the share of renters looking to leave the metro, with relative outbound migration increasing from 21.1% to 28.7%. The combination of these changes could mean that Boston is poised for more turnover in its renter population in the near future. This might in part be driven by the fact that Boston has always been a popular city among college students, who have increasingly shifted to remote learning over the past few years.

Tyler Durden Tue, 11/23/2021 - 19:20

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Science

Life Sciences Expansions Take Off as 2021 Wraps Up

Several life sciences companies and life science-focused real estate firms announced expansion plans as 2021 comes to an end.

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Life Sciences Expansions Take Off as 2021 Wraps Up

Several life sciences companies and life science-focused real estate firms have announced expansion plans as 2021 comes to an end. Here’s a look.

Novavax to Expand Maryland Campus

Novavax, on the cusp of getting its COVID-19 vaccine authorized in numerous countries around the world, is expanding its footprint in Gaithersburg, Md., where it is headquartered. The European Medicines Agency (EMA) is expected to authorize the company’s vaccine soon, and so is the U.S. Food and Drug Administration (FDA). Czechia has already ordered 370,000 doses, with deliveries expected at the beginning of 2022. The company also has a deal with Fujifilm Diosynth Biotechnologies to manufacture millions of doses of the Novavax vaccines at its facilities in Billingham, U.K., with a £400 million investment in expansion.

Four Corners Acquired 150,000-Square-Foot Complex in Belmont, Calif.

Four Corners Properties acquired a 150,000-square-foot office building in Belmont, Calif., called the Shoreway Innovation Center. The seller was Westlake Group. Westlake bought it in 2016 for $61 million. The company plans to expand its use for life sciences, noting that 82% of it is currently leased to a mix of tenants with an average of less than three years lease term remaining.

“Shoreway Innovation Center offers the opportunity to bring office and life sciences space to a market where tenant demand is far outpacing available supply,” said Mike Taquino, executive vice president of CBRE’s Northern California Capital Markets team.

Genentech Leases Building Under Construction in South San Francisco

Source: BioSpace

Boston Properties and Alexandria Real Estate Equities are leasing a building under construction in South San Francisco to Genentech. It will be the first phase of a life sciences campus. The building is at 751 Gateway and is 229,000 square feet. The campus will be called Gateway Commons and is a joint venture between the two real estate firms. They expect initial occupancy toward the end of 2024. Genentech has been headquartered in South San Francisco for forty years, with a large corporate headquarters made up of 4.7 million square feet of five neighborhood hubs. The new site is about one mile’s distance from their main campus.

Mispro Biotech to Open New Facility in North Carolina in Early 2022

Mispro Biotech Services plans to open a new facility in Research Triangle Park (RTP), N.C., in early 2022. Mispro is a leading contract vivarium organization (CVO). The new facility, a full-service vivarium research facility, will be central to one of RTP’s biopark campuses.

“Since we first opened our doors here in 2013, we have seen incredible growth in the RTP cluster,” said Philippe Lamarre, chief executive officer of Mispro. “The time was right to expand into a new facility with more space and modern amenities where we can support the influx of biotechs who are seeking in vivo lab space.”

Laura Gunter, president of NCBIO, representing the life sciences industry in North Carolina, noted, “Mispro has become a cornerstone of the Triangle ecosystem as contract research and support companies are finding increased favor. Biotechs of all sizes and therapeutic disciplines are focusing more on their core competencies, which is opening the door to innovation like Mispro’s contract vivarium option. We are pleased to see their decision to expand here and support more North Carolina companies.”

BioSpace source:

https://www.biospace.com/article/life-science-companies-announce-expansion-plans-as-they-wrap-up-2021

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Real Estate

Gentrification Tsunami Transforms Austin Into Least Affordable US City

Gentrification Tsunami Transforms Austin Into Least Affordable US City

Austin, Texas is one of the nation’s fastest-gentrifying cities as the rapid influx of affluent millennials pushes out low-income residents. Parts of Autin that were…

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Gentrification Tsunami Transforms Austin Into Least Affordable US City

Austin, Texas is one of the nation's fastest-gentrifying cities as the rapid influx of affluent millennials pushes out low-income residents. Parts of Autin that were once lined with mobile home parks and industrial yards have become modern apartment buildings and trendy restaurants, according to NYTimes

The working poor of Austin, many of which reside in Black and Latino neighborhoods, find themselves in a rapidly changing city impacted by gentrification. Younger generations have been pouring into Austin over the last decade, supercharged in the last few years as large technology companies expand operations in the metro area. 

A decade ago, Austin was one of the most affordable places to live in the country and a liberal oasis. Now it's become one of the least affordable areas. On average, 180 new people were moving to the city every day during the pandemic as housing inventory was historically low. This combination ignited home prices, hitting a record of $536,000 in October, up from about $441,250 a year ago. Prices are more than doubled since 2011. 

Soaring home prices, rising property taxes, and redevelopment projects have unleashed gentrification in more than 35 neighborhoods, and another 23 are at risk, according to a 2018 study by the University of Texas. 

"We knew it was coming," said Francisco Nuñez, who lived in a Cactus Rose Mobile Home Park trailer for over two decades. He said the trailer park was sold to a developer to make way for new apartments that cost double his rent. This trend is happening all over the city and pushing the working poor further and further outside city limits.

Working poor are not happy with gentrification. 

Much of the gentrification has been due to an exodus of people from California and Northeast states, attracted by new jobs and the economic prosperity of a thriving city due to Apple, Amazon, IBM, AT&T, Tesla, and Samsung opening new campuses or expanding operations. 

The flurry of high-paying tech jobs in the city has unleashed inflationary forces on the metro area, boosting the cost of living from one of the cheapest in the US to the most expensive in under a decade. Rob Gordon, the manager and real estate agent with the realty company, JBGoodwin, said the city expanded by 160,000 people in the last decade. 

Gordon said that the neighborhood of Northwest Hills, about 20 minutes from downtown, saw a large buying wave this spring, with 18 of the 19 homes bought over the list price. He said one home was listed for $975k and sold for $1.395 million. 

For as liberal as Austin is, one would suspect an uproar from local politicians amid the gentrification crisis in the city. 

Tyler Durden Wed, 12/08/2021 - 20:40

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Real Estate

A Fund That Profits from Real Estate Trends

COVID-19 has done a number on the real estate market. In many places, the sellers’ market exacerbated by COVID-19 still persists, and that can make things difficult for people or businesses looking to secure a location. So, those individuals and businesse

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COVID-19 has done a number on the real estate market. In many places, the sellers’ market exacerbated by COVID-19 still persists, and that can make things difficult for people or businesses looking to secure a location. So, those individuals and businesses that already own real estate, whether to sell or in this case primarily rent, have found themselves in an advantageous position. One potential way to take advantage of this trend is through an exchange-traded fund (ETF) like iShares Residential and Multisector Real Estate ETF (REZ).

This fund invests in a broad swath of U.S. real estate investment trusts (REITs). This includes residential REITs, health care REITs, and specialized REITs such as Public Storage (PSA). This fund was recently changed from its former investment strategy focused only on residential REITs – hence the ticker symbol. The fund has some built-in diversification measures, including a clause stating that holdings over 5% can make up only 45% of assets.

REITs are usually dividend-paying investments due to their legal structure. As a result, REZ pays out close to 2%, which is higher than many ETFs. The fund’s expense ratio of 0.48% is ordinary. Assets under management total $1.25 billion.

REZ has had solid results this year, up 38.9%. It has averaged returns of about 12% annually, not including dividends, over a longer time frame.

Chart courtesy of StockCharts.com

REZ has 44 positions in total. The top 10 holdings have just under 60% of the fund’s assets invested in them, and they include Public Storage (PSA), 9.86%; Welltower Inc. (WELL), 7.59%; AvalonBay Communities Inc. (AVB), 6.64%; Equity Residential (EQR), 6.48%; and Invitation Homes Inc. (INVH), 4.83%.

For investors seeking to make profits from the domestic real estate market as a whole and gain some nice dividend payouts at the same time, iShares Residential and Multisector Real Estate ETF (REZ) is an investment that may be worth consideration.

The post A Fund That Profits from Real Estate Trends appeared first on Stock Investor.

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