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Where Renters Are Setting Their Sights in 2024
Minneapolis continues to be a top choice for renters for the third month in a row, with Atlanta and Queens, NY, closely vying for second place.
Jordan B. & Han-Gwon Lung
March 14, 2024
Together with
Good morning. Minneapolis reigns as the top rental city, leading in desired apartment listings for February. Meanwhile, Family Dollar's owner plans to close 1K stores due to various challenges.
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Market Snapshot
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NEW HOTSPOT
Where Renters Are Setting Their Sights in 2024
The search for the perfect apartment heats up this year, with February's RentCafe.com report showing the top cities for renters and emerging trends.
Top Picks for Renters:
#1 Minneapolis: A beacon for apartment hunters, Minneapolis witnessed a staggering 234% surge in apartment views, coupled with a notable dip in availability. This Midwestern jewel is a magnet for renters, evident from the spike in favorites and saved searches.
#2 Atlanta: Maintaining its allure, Atlanta continues to captivate renters, especially those hailing from Orlando, New York, and Chicago, marking its fifth consecutive top-three appearance.
#3 Queens, NY: Despite a slight drop, Queens remains a hotbed for rental activity, boasting a 317% jump in page views alongside a 22% reduction in apartment availability.
#4 Detroit and #5 Cleveland keep their spots warm at fourth and fifth, respectively, with both cities seeing increased page views and interest.
Regional Rundown:
The West dominates the charts with 10 cities, while the South is close behind. The Midwest holds strong with significant representation, and the Northeast makes a notable appearance.
Minneapolis, Detroit, and Cleveland lead the Midwest charge, showing strong renter interest in these cities.
Emerging Destinations: Spokane, WA, sees the highest jump within the top 10, attributing its rise to a 188% increase in page views. Meanwhile, Southern cities like Orlando, FL, and newcomer spots such as Cary, NC, and Winston-Salem, NC, indicate a growing interest in Southern living.
➥ THE TAKEAWAY
Big picture: The current rental trends highlight a growing demand for Midwestern and Southern destinations, with Minneapolis and Atlanta leading the charge. The entrance of new cities like Cary, NC, and Spokane, WA, into the top ranks, spotlights shifting renter preferences. As availability tightens in popular cities, renters are broadening their horizons, exploring new locales that offer a blend of affordability, lifestyle, and career opportunities.
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✍️ Editor’s Picks
Capital injection: LA-based investment firm Kayne Anderson, with $35B in assets, joins Chicago's Lincoln Yards project amid funding challenges.
Get your free book: FranBridge is the #1 trusted source by real estate investors and entrepreneurs for the best opportunities in the 'non-food' franchise world. (sponsored)
Simple solution? NYC owns 196 acres of land in prime Manhattan, worth around $26B, that’s currently underutilized for housing.
Financing heights: Cain International secures $2B in financing, including $500M from JPMorgan (JPM), for an expansive luxury resort development in Beverly Hills.
Federal revamp: The Biden administration plans to optimize federal real estate with a $425M budget, reducing costs and modernizing outdated buildings.
🏘️ MULTIFAMILY
Out with the old: Marcia Fudge will step down as HUD Secretary and be replaced by Deputy Secretary Adrianne Todman, who will step in as interim leader.
Office to home: Despite a shortage in housing, only 55K apartment units are expected to be converted from obsolete office buildings this year.
Trickle-down economics: A study by the Federal Reserve of Minneapolis shows that 100 new market-rate apartments can create 70 affordable housing openings in 5 years.
Build at scale: East West Partners closed a $4.5M deal for a 261-acre plot in Varina, VA, planning 800 homes with prices from $200K–$500K.
🏭 Industrial
Powering up: Qcells North America signed an 843KSF lease at Busch Commerce Center, Cartersville, GA, expanding from $147M.
Orbital launch: Orbital Kitchens signed a 15-year lease for nearly 35KSF in Long Island City, Queens, offering online fast-casual dining.
Chilled out: In 2022, there were $72B of frozen food sales, with annual growth of 13.2% predicted through 2030, driving significant demand for more cold storage space.
🏬 RETAIL
Retail resurgence: Josh Poag, CEO of Poag Development Group, leads the only new lifestyle center planned in the U.S., with insights on retail trends.
Manhattan revival: Manhattan's retail leasing surge sees new entrants, like suburban brands debuting, comprising 1.56MSF, spurring market growth.
🏢 OFFICE
Forceful exit strategy: Activist investor Land & Buildings urged Equity Commonwealth to liquidate its remaining office holdings, citing underperformance.
From office to oasis: San Francisco voters approved Proposition C to convert 5MSF of office space into much-needed homes by 2030.
Net-positive innovation: Wells Fargo's (WFC) $455M Project Falcon in Irving, TX, will total 850KSF and feature net-positive energy and LEED Platinum features.
A MESSAGE FROM CRE DAILY
CRE Daily has partnered with Redwood Living Inc. for a FREE 30-minute webinar on the current state and future outlook of the Build-to-Rent (BTR) market. Register to watch this session for insights into the impact of jobs, wages, and broader economic factors on this booming sector.
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DISCOUNT DISMAY
Owner of Family Dollar Plans to Close 1K Stores
Family Dollar locations, which cater to low-income shoppers, are more concentrated in urban areas. PHOTO: PAUL WEAVER/ZUMA PRESS
Dollar Tree has announced the closure of approximately 1,000 stores, including a significant number of Family Dollar locations, following a net loss of $1.7 billion for the quarter ending February 3, 2024.
Financial strain: The loss was largely attributed to goodwill and intangible asset impairment charges following a comprehensive review of its store portfolio. Despite an 11.9% increase in net sales to $8.6 billion for the fourth quarter.
Merger mess: Dollar Tree's acquisition of Family Dollar in 2015, which expanded its footprint to over 16,700 stores in the U.S. and Canada, has been a source of ongoing operational and financial challenges. The company has struggled to fully integrate and optimize the performance of Family Dollar locations, leading to repeated rounds of store closures and financial problems.
Trending: Cash-strapped consumers are shifting their spending habits, impacting discount retailers like Family Dollar. Lower-income consumers are turning to grocery stores instead of restaurants, with McDonald's finance chief noting that some consumers are opting to eat at home more often. This change is affecting the sales and performance of discount stores like Family Dollar.
➥ THE TAKEAWAY
Making moves: To address the underperformance of and focus on growth, Dollar Tree plans to close about 600 Family Dollar stores in 1H23, with additional closures scheduled in coming years. CEO Rick Dreiling aims to concentrate on opening new Dollar Tree stores and expanding product offerings to attract customers across different income brackets.
📈 CHART OF THE DAY
Despite efforts to curb inflation, U.S. consumer prices rose to 3.2% annually in February, slightly higher than January's 3.1%. This exceeds economists' expectations (3.1%) and the Federal Reserve's 2% target.
Inflation has fallen significantly since June 2022's 9.1% peak. Core inflation, excluding food and energy, was 3.8% in February, the smallest increase since May 2021. Energy prices fell 1.9%, mainly due to lower gas prices (-3.9%).
Meanwhile, shelter costs increased by 5.7% YoY, but at a slower rate than last year. The shelter index has a documented lag effect. Excluding shelter costs, consumer prices only rose 1.8% in February.
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