18-Hour Cities
18-Hour Cities are second-tier cities with a population under one million, characterized by higher-than-average population growth, strong job opportunities, and lower cost of living than larger cities. Their population influx is primarily from millennials, driven to these cities by career and recreational opportunities.
18-Hour Cities boast vibrant metropolitan areas with most services, amenities, and transportation operating on an 18-hour basis. The midsize metros also tend to have a unique culture that makes them attractive to residents, such as the music scenes in Nashville and Austin or the outdoor activities available in Denver and Salt Lake City.
Examples include: Portland, OR, Dallas, TX, Raleigh, NC, and Nashville, TN.
24-Hour Cities
24-Hour Cities, on the other hand, are Tier 1 or primary markets where many services and amenities operate on a 24-hour basis. Examples of these cities are the Big Six markets of Boston, Chicago, Los Angeles, New York, San Francisco and Washington, D.C.
Advantages of 18-Hour Cities
18-Hour Cities offer numerous benefits to those who live in them and to real estate investors.
Emerging trends make them attractive commercial real estate investment markets due to their potential to become first-tier cities, as well as their typically low occupancy rates, low capitalization rate compression, and rental growth. Amid demographic shifts across the US, the affordability and job growth present in 18-Hour Cities are a major advantage.
According to the Urban Land Institute, their ability to perform well throughout the pandemic is a testament to their enduring appeal, and they will remain popular among developers and investors. These cities are currently the focus of much new construction with significant opportunities for further development.