According to a new report from JLL, commercial real estate in “gateway” cities could be seeing a resurgence.
The Innovation Geographies report surveyed 100 cities around the world and showed that this year, gateway cities will see a “rejuvenation” as people flock back to offices.
“Despite the pandemic, we expect to see young people moving back to the gateway cities attracted once again by opportunities, amenities and lifestyle,” the report said. “Reflecting their critical mass of talent, diverse industry mix, anchor institutions and agglomeration benefits, the dominance of (these) global leaders as corporate hubs will continue.”
Mix-use developments will drive CRE recovery in these regions, and areas that embrace this type of innovation and diversity will accelerate the number of people back into these cities.
Additionally, the report shows that sustainability initiatives will play a role in bringing people back to urban centers.
JLL ranked San Jose, California as the top city for innovation, which was followed by Tokyo, San Francisco, and New York. The report also ranked San Jose, Boston, and San Francisco as the top cities for talent concentration.
Some smaller cities such as Raleigh-Durham and Denver also ranked in the top 25 as a result of younger workers migrating to areas with a lower cost of living.
However, the report concludes that gateway cities that continue to perform well in these metrics are poised for the strongest economic recovery, which up until now has been relatively slow.