PCCP Market Commentary The 'Burbs Second Quarter 2015
The eponymous movie starring Tom Hanks was released in 1989 at the onset of a massive population shift away from the urban core of American cities and into the suburbs. In the years that have passed since the Great Recession, however, America’s inner cities have led the way in the recovery, leading many to the conclusion that we have entered into a new paradigm of re‐urbanization. As it relates to commercial real estate, the thought is that a shift in population growth away from the American suburb will have a profoundly negative impact on suburban office as employers follow their workforce back into the CBD. Our instincts tell us that the “death of the American suburb” drum beat proliferated in the media is misguided and overplayed, a recipe for a good investment opportunity. In the end, success in real estate investing all boils down to supply and demand. Let’s take a step back and look at the macro forces at work.