As we witness a significant exodus of commercial real estate from coastal cities like San Francisco, NYC, LA and Miami, with landlords defaulting on billions of dollars in debt, many investors are looking for more stable markets.
But where could one invest?
This shift is largely attributed to the surge in inflation post-COVID-19, leading to raised interest rates and potential devaluation of real estate in coastal cities.
At Valore as we’re primarily focused on conserving capital first, we're strategically investing in the Midwest, a region that offers several advantages:
- Reduced exposure to natural disasters: Unlike coastal cities prone to hurricanes, floods, and rising sea levels, the Midwest's geographical location provides a more stable environment.
- Lower cost of living: With lower costs for housing, food, and transportation, Midwest residents typically have more disposable income, facilitating home ownership.
- Robust job market: The Midwest boasts a diverse range of industries, including a strong manufacturing sector, which are less vulnerable to economic downturns than sectors like finance and tech, which are concentrated in coastal cities.
- Less speculative investment: The Midwest has experienced less speculative investment in real estate than coastal cities, reducing the risk of a real estate bubble.
While no market is completely immune to collapse, the Midwest, with its lower cost of living, robust job market, and less speculative investment, is generally perceived as a more stable option than coastal cities.
As such, it's less likely to experience a future real estate collapse, making it an attractive region for strategic investment.
