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Great Location Study: Capital City

By: spaceselectors   June 18, 2019

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A great location is in the state capital.

Capital cities are fantastic for real estate investment. True, some capitals are clearly better than others. On a global basis, capital cities provide a floor for real estate values. Why is this the case?

First and foremost, the capital of a country or a state isn’t going away. Secondly, capitals mean the long-term existence of dozens of government agencies, offices and employees. In addition to those critical pieces of the puzzle, more often than not, capitals usually have at least one state university within its municipal boundaries. As you know, large universities can mean up to 70,000 students. Those students are accompanied by the employees of related governmental agencies who will need housing, goods and services. Thirdly, some State capitals are major tourist attractions due to the quality and quantity of the civic amenities and public infrastructure like museums, performing arts centers and train stations. And last but not least, the capital isn’t going to close or go away. Even when cities go bankrupt, they really don’t disappear. The people that keep those agencies and universities humming have to be employed to keep the State recover and perform basic services like utilities and public safety.

This means that in the end, great locations can be found across all real estate asset classes in State capitals. The certainty of a permanent economic and consumer base is a rare commodity of which most retail investments can benefit from.

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