After a two-year hiatus, the Graaskamp Center was thrilled to host its Spring Board Conference at the Ritz Carlton Chicago on April 7th and 8th. Featuring a theme of “These Times They are a-Changin,” keynote presenters and panelists took a deep dive into the pressing issues of our times, including the war in Ukraine, inflation, and post-COVID supply chain issues. Over 140 board members, graduate students, faculty, and guests attended the event and we’ve received great feedback overall. Below you’ll find a recap of the key takeaways from the demographics panel discussion.
Demographic Trends Driving Commercial Real Estate for the Next Decade
At the Graaskamp Center’s 2022 Spring Board Conference in Chicago, Michael Toolis, a former Vice President at Stantec, moderated an insightful panel discussion with several distinguished industry analysts and economists. The speakers included Christian Beaudoin, Managing Director of Research & Strategy at JLL, Dave Bragg, Co-Head of Strategic Research at Green Street, and Roberto Ramirez, Assistant Division Chief of Special Population Statistics, Population Division at U.S. Census Bureau.
The panel discussed a range of topics including population diversity, growth, distribution, and the real estate considerations of these trends; a summary of their discussion is below.
Population Diversity
- The United States has become more racially and ethnically diverse since 2010
- The number and percent of foreign-born individuals have steadily increased since the 1970s (13.5% of the nation’s current population was foreign-born)
Population Growth
- The current decade is expected to have the lowest population growth in the history of the United States
- 2010-2020 had a historically low population growth of 3.5%
- Population growth could become negative by 2024 if current birth and death rates continue
- Between 2011 and 2021, nearly every county in the US saw declines in its working-age population
- 16 states had a net population decline in the last decade
- COVID-19 accelerated these trends
- This is leading to a competitive nature between cities and states, as any population migration can be seen as a zero-sum game
- In the past, cities could all grow together since the population was growing so much. This is no longer the case
Population Distribution
- US population distribution has flipped in the last century
- In 1920, 60% of the population was in the Northeast and Midwest
- In 2020, over 60% of the population was in the South and West
- Utah, Idaho, and Texas have been the biggest winners with the highest population increases in the last decade
- Illinois, Illinois, Mississippi, and West Virginia were the biggest losers with the largest population decreases in the last decade
Real Estate Considerations
- Corporate tax rates and cost of living have emerged as a driver of the migration discussion
- Access to good schools is also an important factor
- The flight to lower taxes and lower costs of living can only be temporary
- Higher density requires additional services, such as schools, transit, infrastructure, which will require funding through taxes
- Household income growth is the key demand driver
- Households with a bachelor’s degree or higher have experienced higher household income growth over time
- Over the past decade, many new markets have emerged as centers of population growth and tenant demand
- Growth markets such as Austin, Nashville, and Salt Lake City have narrowed the gap relative to gateway cities in terms of costs, entertainment, and culture
- New markets are emerging to become “the next Austin.” These include Tampa, Greenville, and Albuquerque
- Population growth and job creation across with Sun Belt have dramatically outpaced most gateway cities
- Issues in cities, such as COVID, civil unrest, and crime, may only be temporary
- Gateway cities possess infrastructure advantages
- The future of work will favor cities due to agglomeration and information-sharing
For additional information, check out the speakers’ slides.