By Tristan Navera – Staff reporter, Columbus Business FirstSep 19, 2019, 2:41pm EDT
Central Ohio’s growth is attracting more attention from the national real estate world.
The city has been named a market to watch in 2020 by PricewaterhouseCoopers and the Urban Land Institute. Those organizations’ annual “Emerging Trends in Real Estate” report – based on a survey of 1,5000 real estate investors nationally – ranks the metro 27th of 80 around the country for its real estate potential.
“I always looked at Columbus as being very similar to Austin, Texas, as a state capital and home to a major research institution and having a large population,” said Mitch Roschelle, a PwC partner and the report’s co-publisher. “Those cities produce workers for the economy of the future.”
“You have a lot of the same elements and that’s what driving the overall economic expansion in Austin and Columbus,” Roschelle said. “It’s an affordable place to do business (and the) population is growing quickly. Jobs chase people, it’s not the other way around.”
Jim Glassman, an economist at JPMorgan Chase, pointed to the city’s performance above both national and Ohio averages as a sign of strength. But he also said the city’s going to compete with the rest of the nation’s fast-growing cities, not just the Midwest, for new jobs.
“This is really where all of the activity is taking place,” Glassman said at a recent economic forecast in Columbus. “But these other Sun Belt and New England states are growing faster, so what matters is are you growing fast enough to create enough jobs for people coming into the job market.”
The PwC report also notes this challenge, even as the hot real estate housing market inflates as slow construction prompts rising prices in the local multifamily market.
“There seems to be a question about the sustainability of recent growth, which is an anomaly in the Midwest,” the report states. “The presence of the enormous campus of Ohio State University has made the area a magnet for young people, and may have fueled apartment demand. But there has not been comparable investor demand for multifamily assets.
“Industrial purchases have been more prominent, which may provide a clue about the metro area’s true locational advantage – the intersection of Interstates 70 and 71, providing exceptional access to markets in a 360-degree ring around the city.”
Austin, Raleigh-Durham, Nashville and Charlotte – oft-mentioned competitors to Columbus economic developers – were the top-ranked metros in the PwC report. Roschelle said the pro-business environment, tax and regulatory ease help Austin thrive.
“Those are the seeds, the people are the soil, the water is the government finding everything it can for companies to do business there,” Roschelle said. “Once you get the people finding reasons to move there, you start to get the cycle to build on itself.”
Meanwhile, Columbus came in fifth place of 17 metros in CommercialCafe’s recent comparison of Rust Belt economies – the city’s 19% population growth being the strongest of all Midwestern cities. The study also noted the city’s housing inventory has grown 8% since 2018, while 90% of local companies surveyed plan to hire more workers in the near term.
The city’s labor force participation sits at an above-average 70%, and its 6% bump in the percentage of residents who are college-educated also shows confidence that Columbus’ economy is adapting well in the future economy, according to the study.