f you think your metro area has reached, or is reaching, its development
threshold, you had better sit down. You haven?t seen anything yet.
New development research produced for The Brookings
Institution Metropolitan Policy Program in December 2004 predicts a staggering
amount of new residential, commercial and industrial development in the
next 25 years — enough most likely to eclipse the amount of development
seen in any generation so far.
“In 2030, about half of all existing development will
have been built after 2000,” writes
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Dr. Arthur Christian Nelson, professor and Director of Graduate Studies
at the Alexandria Center at Virginia Polytechnic Institute and State
University, in his study, Toward a New Metropolis: The Opportunity to
Rebuild America. “Growth-related and replacement development will be
more than two-thirds of all development existing in 2000. All told,
perhaps $25 trillion in new development will occur between 2000 and
2030, maybe more.”
But where?
More pertinent to us than the tsunami-sized numbers involved (most new-space predictions fall somewhere in the billions-of-square-feet range) are Nelson?s predictions of which areas will be the main recipients of the development. We?ll focus on just the industrial here (this and other reports are available online at www.brookings.edu. metro).
Interestingly, demand for industrial space in the Midwest will outpace that of other regions, much of which will be replacement space; 63.6 percent will be new construction. Which rings true with those of us tracking new and expanding facilities on a regular basis. The Conway Data New Plant database, for instance, consistently ranks the industrial Midwest as the leading development region by number of corporate projects, regardless of economic circumstances.
But other areas will grow faster. For example, the top four cities ranked by percent of square feet in 2030 built since 2000 will be Austin, Texas, with 105.9 percent growth and 44.4 million new sq. ft. (4.1 million sq. m.); Sacramento, Calif., with 105.2 percent growth and 40 million sq. ft. (3.7 million sq. m.); Las Vegas, Nev., with 98.5 percent growth and 15.7 million sq. ft. (1.4 million sq. m.); and Salt Lake City, with 93.7 percent growth and 51.1 million sq. ft. (4.7 million sq. m.).
But this growth will be dwarfed by the volume of new projects in the major industrial markets of Cleveland, Ohio; Los Angeles; Detroit, Mich.; and Chicago. These same major manufacturing markets are regulars in our Top Metros ranking of New Plant database projects every March. (Look for a new ranking in the March 2005 issue of “micropolitans,” a new metro designation with substantial area economic development implications.)
The Brookings report is a gold mine of insights into which regions, states and metros will see most of the action. For now, suffice it to say the analysis — and our New Plant data — suggest that past is prologue. High-growth and slower growth areas will see more of the same. Much more.
Till next time,
