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5 Top Apartment Urban Core Submarkets and Residents’ Jobs

White Collar Dominates

By Chuck Ehmann | Friday, September 23, 2016

A large proportion of apartment renters – especially millennials and downsizing baby-boomers – like to live where the action is. They desire a live/work/play lifestyle that requires easy access to office, nightlife and entertainment centers.

So, it’s no surprise that apartment developers concentrate much of their new projects in downtown/uptown areas. While suburban areas as a whole receive more new properties than the urban core, those submarkets are more spread out. The density of urban core apartments means those submarkets are getting the most new supply.

Of the six submarkets with the most new units identified for 2016 completion, according to Axiometrics data as of Sept. 18, 2016, five can be classified as urban core.

The five urban core submarkets in the table above also are in the top six for 2017, with New York’s urban Midtown West replacing Plano/Allen/McKinney in that ranking. Even that lone suburban area in the table has its urban component: The submarket includes the Legacy West district where Toyota and FedEx, among others, are building new headquarters, and the growing city of Frisco, where many mixed-use projects and office buildings are coming to market.

Since apartments in urban submarkets net the highest rent levels in a market and most of the new properties are ranked as Class A, not everybody can afford to live there. Axiometrics economists examined U.S. Census demographic data to determine what types of occupations are prevalent among residents of these submarkets.

The results vary by market, but white-collar workers are overwhelmingly the most likely residents of urban-core apartments. In four of the five urban submarkets listed, the “Management, Business, Science and Arts Occupations” category contains more than half of the area residents.

The Sales and Office Occupations category ranks second in all of the above submarkets except Brooklyn, which has the highest concentration of service workers. The 13.6% of blue-collar residents also is the highest among the group, the rest of which contain 5%-7% blue collar. Construction workers comprise 30.1% of Brooklyn’s blue-collar workforce, according to the Census figures.

In the services area, it’s no shock that Food Preparation and Serving has the highest percentage of workers in that sector, with all the trendy eateries popping up in the borough.

Houston’s Montrose/River Oaks submarket has the highest concentration of white-collar jobs, which are held by 94.9% of its residents. This is natural, given the area’s proximity to downtown, the Galleria and Houston’s world-class medical district. Health care made up 11.8% of the Management, Business, Science and Arts category.

The Atlanta/Fulton submarket, which includes downtown and Buckhead, has higher management/financial and education/legal/arts concentrations. Education has an especially high level, with Georgia Tech and Georgia State universities in the area, as well as several smaller colleges.

Nashville’s Downtown/West End/Green Hills submarket is not only the capital of country music, but it also has the highest concentration of sales and office workers among the five urban submarkets studied. In fact, the category is almost evenly split between sales people and office personnel.

Seattle is a secondary tech hub, and that status is reflected by the fact that Computer and Mathematical Occupations has the second-highest number of workers living in the Downtown/Capitol Hill/Queen Anne submarket. And note the percentage of food service employees and an area of foodies and coffee heads.

It’s primarily young urban professionals – what would have been called “yuppies” back in the day – who live in downtown/uptown apartments, as the demographic data shows. With high rents and a lot of work, shopping, dining and entertainment opportunities nearby, not to mention access to public transportation, white-collar millennials will likely be the dominant generation in those submarkets for years to come.

Chuck Ehmann

Chuck Ehmann

Real Estate Economist

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