Infrastructure forms the fabric of our daily lives and powers our economic prosperity. Buildings, roads, bridges, and communication networks are just a few examples of the vast web of systems that give us space to work, play, and learn. When these systems are maintained and functioning well, they enhance the value of a region’s commercial real estate, leading to increased occupancy and higher rents.
The U.S. has long struggled to properly fund and develop its infrastructure, which has resulted in traffic congestion, blackouts, and worrisome conditions for many bridges and roads. In 2017, the American Society of Civil Engineers gave the country a grade of D+, saying that $3.6 trillion would be needed by 2020 to get to an “adequate” level of infrastructure. This shortfall has a significant cost attached to it—every year, we spend 5.5 billion hours sitting in traffic, at a loss of $120 billion in time and fuel. Miami knows this problem firsthand, as it ranked as the 10th most traffic-clogged city in 2018, with the average local driver in the car 64 hours a year.
But there is hope on the horizon. Politicians of all stripes agree on infrastructure as a basic good, as do 75 percent of Americans as a whole. An increase of $18 billion a year would create 200,000 jobs and add $11 billion to the U.S. economy. CRE investors know this all too well—infrastructure is one of the top reasons people choose to purchase or develop a property. When roads, power grids, and sea-ports are running smoothly, the value of nearby CRE improves dramatically.
The benefits of an improved infrastructure across many categories that have great importance to CRE investors.
Many urban areas have heard this call to action and have projects already in the works:
Although the country as a whole still has a long way to go towards systemic infrastructure improvements, these initiatives show how individual communities can take steps to smartly overhaul their roads, bridges, and railways. CRE will be a chief beneficiary of this work.
Morris Southeast Group stands ready to help you take full advantage of this trend, with CRE expertise born from years of experience. For a free consultation on our commercial real estate investment or property management services, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.