More people are migrating across America, settling in places like the Los Angeles suburbs, Dallas, and Nashville in big numbers.
More people are migrating across America, settling in places like the Los Angeles suburbs, Dallas, and Nashville in big numbers. You’ve probably heard about this trend in the news or at a dinner party: people are leaving major cities like New York City, Los Angeles, and Chicago for Florida, the Sun Belt, or less-populated areas of the West.
But it’s not the whole story.
While some studies support the notion of Sun Belt migration, they often stop at a singular anecdote or data point, missing the nuances. The full truth of what’s bringing people to places like Los Angeles, Dallas, and Nashville right now is a bit more complex.
But it’s not the whole story.
While some studies support the notion of Sun Belt migration, they often stop at a singular anecdote or data point, missing the nuances. The full truth of what’s bringing people to places like Los Angeles, Dallas, and Nashville right now is a bit more complex.
Changing populations
The effects of the pandemic on population migration continue to be felt across the country as both individuals and businesses adjust to a new normal. Factors like the cost of living, weather, municipal policies, new technologies, and the rise of remote work all play a role in determining where people choose to live and work.
Others are moving for more personal reasons, such as desiring proximity to support systems or seeking a home base that’s more aligned to their values and priorities.
What’s clear is that America is in motion. That fact is driving big business decisions for investors, owners and occupiers across the country, like where to build that next apartment tower, lease office space or build that big distribution center or HQ building, as city populations rise and fall with changing times.
Others are moving for more personal reasons, such as desiring proximity to support systems or seeking a home base that’s more aligned to their values and priorities.
What’s clear is that America is in motion. That fact is driving big business decisions for investors, owners and occupiers across the country, like where to build that next apartment tower, lease office space or build that big distribution center or HQ building, as city populations rise and fall with changing times.
Where are people going? Which areas are some of the latest in demand? And why? Let’s take a closer look at a few key markets that are seeing spiking in-migration
A tale of two Los Angeleses
Los Angeles, really? If you’ve been following the headlines about Angelenos leaving for Texas, this one might come as a surprise.
California’s net migration story has, after all, been largely negative—which is often what’s reported on at this point—with major cities, like Los Angeles, touted as areas with some of the biggest losses.
But like many major cities around the United States, Los Angeles’ net migration story is a tale of two cities (or rather, 88 cities, which is the total number of incorporated cities within Los Angeles County, including the city of LA itself and famous areas like Santa Monica). What’s being reported is far from the full story.
California’s net migration story has, after all, been largely negative—which is often what’s reported on at this point—with major cities, like Los Angeles, touted as areas with some of the biggest losses.
But like many major cities around the United States, Los Angeles’ net migration story is a tale of two cities (or rather, 88 cities, which is the total number of incorporated cities within Los Angeles County, including the city of LA itself and famous areas like Santa Monica). What’s being reported is far from the full story.
If we look at downtown LA as a core-based statistical area (CBSA), net migration has indeed been consistently negative since the beginning of the pandemic. Concerns about safety and the rising cost of living have pushed both individuals and companies outside of the central business district.
But Los Angeles is more than its downtown, and it always has been. Even before the pandemic, downtown was only an emerging area for residents, as it had been in prior economic cycles–always almost making it as a residential destination but facing setbacks when the markets changed. Many of the most iconic images of LA, in fact, take place outside of the city of LA in other parts of the county–like the boardwalk in the incorporated city of Santa Monica, which, along with neighboring Culver and Century cities, has seen the positive net migration of high-earning individuals that can afford the lofted cost of living.
Century City, which sits a hop, skip, and a jump from both Santa Monica and the western region of the city of LA, is currently the hottest area for office construction, boasting vacancy rates in the single digits at its trophy and class A properties. Law and consulting firms from downtown LA, entertainment companies from throughout the city and tech (including AI) companies from the Bay Area are also flocking to the neighborhood, as well as nearby Century City, showcasing that while these companies might be leaving certain areas, they aren’t going far.
But Los Angeles is more than its downtown, and it always has been. Even before the pandemic, downtown was only an emerging area for residents, as it had been in prior economic cycles–always almost making it as a residential destination but facing setbacks when the markets changed. Many of the most iconic images of LA, in fact, take place outside of the city of LA in other parts of the county–like the boardwalk in the incorporated city of Santa Monica, which, along with neighboring Culver and Century cities, has seen the positive net migration of high-earning individuals that can afford the lofted cost of living.
Century City, which sits a hop, skip, and a jump from both Santa Monica and the western region of the city of LA, is currently the hottest area for office construction, boasting vacancy rates in the single digits at its trophy and class A properties. Law and consulting firms from downtown LA, entertainment companies from throughout the city and tech (including AI) companies from the Bay Area are also flocking to the neighborhood, as well as nearby Century City, showcasing that while these companies might be leaving certain areas, they aren’t going far.
A dollar goes farther in Dallas
Dallas has surpassed Chicago and Los Angeles to become home to the second largest population of banking and finance workers, only preceded by New York, according to the Bureau of Labor Statistics.
Major banks, such as Bank of America, Goldman Sachs, and Wells Fargo, are building campuses in Dallas in response to these changes.
What’s bringing them to Texas? For many of these workers the decision to make the move came to one simple but meaningful reason: with no state tax income and a cheaper cost of lliving, their dollar simply goes much farther in Dallas.
By cost of living, Dallas currently sits far below many of the most frequent origin cities for migrators. The majority of people moving to Dallas moved from an area with higher cost of the living. Of the cheaper origins which didn’t have a higher cost of living? Five of them are other locations already in Texas. (Not a shocker when you see Texas is also the number one state
destination according to U-HAUL, with Dallas being the ninth top city destination nationally.)
Major banks, such as Bank of America, Goldman Sachs, and Wells Fargo, are building campuses in Dallas in response to these changes.
What’s bringing them to Texas? For many of these workers the decision to make the move came to one simple but meaningful reason: with no state tax income and a cheaper cost of lliving, their dollar simply goes much farther in Dallas.
By cost of living, Dallas currently sits far below many of the most frequent origin cities for migrators. The majority of people moving to Dallas moved from an area with higher cost of the living. Of the cheaper origins which didn’t have a higher cost of living? Five of them are other locations already in Texas. (Not a shocker when you see Texas is also the number one state
destination according to U-HAUL, with Dallas being the ninth top city destination nationally.)
The inward migration has helped office jobs in Texas grow by more than three times the national average over the last five years, according to Lightcast.
The influx into the state helped Texas receive the critical financial support needed to sustain and enhance life here. Texas received an incredible amount of federal spending in recent years, awarded more than $1.4 trillion from 2019-2023, of which nearly 25% was allocated to core counties in the Dallas-Fort Worth Metropolitan Area. The Federal funding has improved health and human services, education, and transportation, increasing the standard of living in the region. This has encouraged people not just to come and consider Dallas, but to plan to stay for a good long while.
The influx into the state helped Texas receive the critical financial support needed to sustain and enhance life here. Texas received an incredible amount of federal spending in recent years, awarded more than $1.4 trillion from 2019-2023, of which nearly 25% was allocated to core counties in the Dallas-Fort Worth Metropolitan Area. The Federal funding has improved health and human services, education, and transportation, increasing the standard of living in the region. This has encouraged people not just to come and consider Dallas, but to plan to stay for a good long while.
Assets abound in Nashville
The state with the third highest positive net migration within the last 12 months is Tennessee. Just over 28,400 moved to the state in the last year, moving from states that include California, Florida, Illinois, New York, and Arizona.
Nashville has benefited significantly from these migration shifts, accounting for 42% of the state's total net migration of residents in the last 12 months.
What’s driving its growth?
The tourism industry continues to be a huge economic driver for Nashville, which had a record 16.8 million visitors in 2023, a 4% increase year-over-year. Visitors spend, on average, $29 million a day throughout the city, which generated $10.56 billion in total visitor spending in 2023.
But the economy is also nicely diversified, with no one industry sector accounting for more than 20% market share. This has created a pro-business environment to attract new-to-market companies and talent.
Nashville’s economy experienced a 1% increase in total non-farm jobs from July 2023 to July 2024.
What’s driving its growth?
The tourism industry continues to be a huge economic driver for Nashville, which had a record 16.8 million visitors in 2023, a 4% increase year-over-year. Visitors spend, on average, $29 million a day throughout the city, which generated $10.56 billion in total visitor spending in 2023.
But the economy is also nicely diversified, with no one industry sector accounting for more than 20% market share. This has created a pro-business environment to attract new-to-market companies and talent.
Nashville’s economy experienced a 1% increase in total non-farm jobs from July 2023 to July 2024.
In the commercial real estate sector, Nashville currently has just over 2 million square feet of office space under construction, with an office vacancy rate of 20.6% and an average asking rent of $33.02 per square foot in the second quarter of 2024. Major office deals year-to-date include significant leases by Oracle (121,064 square feet) and TikTok (196,488 square feet across two properties).
Nashville’s commercial real estate market reflects the city's overall economic growth, attracting businesses and individuals alike as a go-to destination that truly has it all.
Nashville’s commercial real estate market reflects the city's overall economic growth, attracting businesses and individuals alike as a go-to destination that truly has it all.
What does this mean for commercial real estate at-large?
Market patterns are shifting.
Making key geographic decisions requires critical insights that are far from surface-level. It necessitates diving deeper to unearth the true complexities of these changes across markets: how widespread migrations are, where people are moving to, and, most importantly, why.
Making key geographic decisions requires critical insights that are far from surface-level. It necessitates diving deeper to unearth the true complexities of these changes across markets: how widespread migrations are, where people are moving to, and, most importantly, why.
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