One area of interest warehouse investors should keep an eye on is the potential for a population shift in response to lock-downs nationwide. This shift could lead to warehouse demand increasing in tertiary markets.
Some estimate we could see a pretty large population movement over the next couple years as people look to move from highly dense areas into areas with more open space. If this population shift were to happen, it could drive a demand for increased warehouses and distribution centers outside major metro areas and into smaller tertiary markets especially with the increased prevalence of grocery shopping happening online.
This recent article, More people from coronavirus hot spots are moving to Maine, from Emily Burnham in Bangor Daily News highlights how Bangor Maine is just one instance of an area which is seeing increased interest in people looking to relocate. As the article mentioned, “Having lived under some of the largest outbreaks in the country and the restrictions that have come with it, some residents of cities including New York, Boston and Detroit want to find a new place to live — one that’s cheaper and less densely populated…Real estate agents in eastern Maine say they’re seeing growing interest from clients looking to relocate to the area.”
This article highlights a trend we could definitely see more of over the coming year and six months as people evaluate their housing options as more companies go remote. This line from the article perfectly sums it up, “If people are no longer required to physically come into and work at a specific office on a daily, weekly or even monthly basis, that means that they aren’t necessarily tethered anymore to one city or state. Why live in an expensive apartment in New York when you could live in Maine and spend a much smaller fraction of your income on housing for more space and land?”
For those looking to find good warehouse investment opportunities, smaller tertiary markets along the Northeast and Mid-Atlantic may offer excellent opportunity if people continue to reevaluate living in major metro areas and more consider smaller rural and outer suburban areas.