Where the Jobs Are, Part Two

filed under: Commercial Real Estate Market posted on May 22nd, 2009

Employers in health care and social assistance, educational services, and government have added a combined 836,800 net payroll jobs since the recession began in December 2007, as discussed in last week’s Good News Friday. What about the geographical distribution of job changes; have any states generated jobs since the recession began? Texas, Oklahoma,image002 Wyoming, North Dakota and Alaska have more jobs in March 2009 than they did in December 2007 thanks to high energy and commodity prices that extended through most of 2008. The District of Columbia, with its reliance on the federal government, also added jobs. Since the recession worsened in September 2008, even these stalwarts have lost jobs with the exception of Alaska and North Dakota. Nevertheless, the recession is likely to be shallower in this region of the country. Which states will bounce back more quickly when the recession ends? Look for metropolitan areas specializing in technology, biotech and renewable energy and those able to attract young, educated workers to prosper in the long run – areas like Seattle, Portland, San Francisco, Silicon Valley, San Diego, Denver, Austin, Raleigh-Durham, the greater D.C. area and Boston. Recent articles in The Atlantic and The Wall Street Journal discuss which areas are likely to enjoy a competitive long-term advantage. But don’t count out other markets for real estate investment opportunities (debt or equity), particularly those with high barriers to entry. Cap rate spreads between primary, secondary and tertiary markets, which had compressed during the bubble years, are expected to widen again, meaning that secondary and tertiary markets may begin to offer more attractive yields – a greater risk premium – relative to primary markets.

 Source: Robert Bach, SVP, Chief Economist, Grubb & Ellis

posted by Ark Rhowmine

This entry was posted on Friday, May 22nd, 2009 at 9:17 am and is filed under Commercial Real Estate Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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