Urban Amenities with a Suburban Address

City Living isn’t Just for Cities Anymore.

Walkability. Bike-sharing. Delivery of just about anything. This is urban life.

For the first time in history, the world’s population is more urban than rural. And you no longer have to live in the city to enjoy the amenities of city life. Areas once considered part of suburbia have been transformed and now offer the same conveniences once limited to cities.

Why does this matter to you as an investor? Each year U.S. consumers spend $13 trillion dollars. Understanding shifts in consumer spending is crucial to assessing companies and their opportunity sets. People living in urban areas spend less money on cars and transportation and more on cosmetics, clothing, restaurants and travel. New business models offering the combination of convenience and choice reinforce the allure and advantages of urban living.

How is urbanization changing the economy? Here are just a few examples:

  • Online and mobile food ordering is one of the fastest growing business segments in the U.S.  With more high quality, cost effective options, urban dwellers spend 40% more than their non-urban counter-parts on food prepared outside the home.
  • Innovations in the transportation sector are changing urban mobility. Services like Uber and Lyft are creating new business models, changing old ones, and extending the luxury and convenience of car services to geographic areas where taxis are sparse.
  • The expansion of same-day delivery service from retailers such as Amazon has extended out to peripheral towns and urban suburbs with the possibility of same hour delivery right around the corner.
  • The new urban planning models focus on being pedestrian and bike friendly — which pays offs in higher real estate values. According to a study by Redfin of the Washington, D.C. metro area, a 20-point increase in a walkability score translates into a $9 per square foot premium in office rents, $7 premium in retail rent, 80% increase in retail sales, a $300 per square foot premium in residential rents, and an $80 per square foot premium in residential housing prices.

Learn more about why we’re investing in urbanization:
Download the white paper here.

 

Want to learn more about our proprietary thematic investment strategy? Let’s talk.

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