Multifamily Executive’s recent article on several multifamily markets in the Midwest had some interesting things to say. 

Author Jennifer Popovec opened the piece by noting a recent Forbes article titled “America’s Fastest Dying Cities” in which six of the top ten cities were located in the Midwest.  The Midwestern cities earning these dubious honors were Ohio’s Youngstown, Canton, Dayton, and Cleveland, as well as Michigan’s Detroit and Flint. 

She goes on to highlight the fact that many of the large multifamily REITs have pulled out of the area, though many local investors are hunkering down and hanging on.  A Midwest based Grubb and Ellis economist, Bob Bach, notes

“Midwest markets are not as well suited for big investors searching for appreciation.  They’re more suited for local and regional investors who take a more hands on approach.”

Popovec went on to list markets with potential in the Midwest – Columbus, Cincinnati, Minneapolis / St. Paul, Cleveland, Detroit, Ann Arbor, and Indianapolis.  You need to read her article to determine if you agree with her logic and assumptions about the markets.  She’s certainly not looking at the markets from the perspective an emerging market / recovering market investor, though she does indeed make a good point that that entire Midwest is not an investing wasteland. 

We’re agree with the concept that the Midwest does hold some hidden gems for multifamily emerging market investors, though our list is a bit different that Ms. Popovec’s.  Currently we’re ranking Madison  (picture above) at #17 in our multifamily list, Des Moines at #17, and Indianapolis at #51. 

Detroit, Flint, and Ann Arbor hold interest in terms of potential as well, though the woes of the auto industry have impacted employment so massively in these markets we’re still very cautious here.  The American auto industry is at a “survive or die crossroads” and even if they’re successful in procuring federal funds in the short term, legacy healthcare and union costs are suffocating the companies, and other auto manufacturers appear to be far ahead in the race for more efficient and affordable vehicles.  Time will tell as noted yesterday. 

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