Urban Dwellers Outnumber Rural Residents Worldwide For The First Time In 10 Years
Talk about turning tables. For the first time in 10 years more people live in urban cities than they do in rural areas throughout the world, according to a recent JLL Fringe Markets report. As of 2017, 54% of the world's population lived in cities. In the U.S. the shift toward city living is pushing developers to revitalize city centers and fringe neighborhoods alike, but often the biggest difference can be seen on the outer edges.
This trend toward urbanization is not limited to cities like New York City and San Francisco. It is happening all over America. From Miami to Minneapolis, we decided to check out six U.S. cities where fringe markets are flourishing.
Several miles from Miami Beach, Miami's Wynwood district is undergoing a transformation as developers repurpose old industrial spaces for trendy office buildings. Neighborhood sports food trucks, graffiti and small firms are setting up shop in the area. Across town, the Design District continues to attract luxury retail boutiques while mixed-use and retail developments increasingly target Midtown. JLL said Miami's evolving fringe markets could play a vital role in helping the city meet its future office needs, and RedSky Capital is set to deliver Wynwood's first office tower, Cube Wynwd, next year.
Charlotte's South End is undergoing a metamorphosis. The neighborhood is an old industrial district, and today it is catering to the live-work-play trend as developers open a mix of offices, cultural centers and multifamily developments. Two creative office developments totaling some 147K SF are expected to break ground in the neighborhood within the next year and a half. Charlotte's office market has a 3.6% vacancy rate, and nearly 70% of the 180K SF under construction has been pre-leased.
Over on the West Coast, Oakland's once sleepy Uptown neighborhood is turning into an artistic, entrepreneurial playground. It was dubbed the hottest neighborhood in the country by the American Planning Association in 2014, and in the last 12 months Uptown office rents have skyrocketed 41%, moving from $36.49/SF to $51.51/SF. Adaptive reuse developments like The Hive, which turned a block of industrial buildings into a web of restaurants and co-working space, continue to emerge. JLL said companies fleeing San Francisco's high rents often land in Uptown, which has in part fueled the area's rent growth and development.
Perhaps one of the most unique fringe markets in the country, LA's Downtown Arts District is still anchored by industrial tenants, but that has not stopped office and multifamily developments from flocking to the area. Millennial professionals have moved into redevelopments in the area, like Berkshire Communities' One Santa Fe, and hip restaurants and boutique retailers line the industrial streets. Warner Music Group is planning to move into the repurposed Ford Factory, which used to make Model T's. Last year Hudson Pacific bought an old Coca-Cola bottling facility to turn it into 150K SF of creative office space.
High-profile developments moving to the Midwest have transformed Chicago's Fulton Market from an industrial neighborhood into one of the city's top submarkets. The neighborhood boasts a vibrant arts and cultural scene, and restaurants in the area are booming thanks to the Chicago Transit Authority reopening the Market's Morgan L stop after 60 years. At the beginning of January 2016 Sterling Bay opened 1K Fulton, a repurposed cold storage facility that now serves as Google's regional headquarters. JLL said several new developments in the neighborhood are set to deliver over the next two years, one of which will serve as McDonald's new global headquarters.
Not long ago Minneapolis' North Loop and Warehouse districts were filled with rail yards, factories and warehouses. Today, they are filled with some of the Midwest's greatest density of tech talent. One of the major developments in the area is Hines' T3, an entirely wooden building that offers 225K SF of office space. Almost 100 tech companies are in the Warehouse District and North Loop, where they occupy more than 830K SF, or one-fifth of Minneapolis' entire office inventory.
