People Are Leaving New York Cityin Droves. Where Are They Going? September 27, 2019 Marc DeLuca Over the course of the last nine years, a total of one million people have moved out of New York City and its tri-state area (New Jersey, Connecticut and Long Island). This is according to a recent report by Bloomberg, and if you do the math, that amounts to almost 300 people per day. In fact, Bloomberg claims that more people are leaving New York City on a daily basis than any other city in the U.S. And that’s double the number of people who were leaving only a year ago. The source of the Bloomberg report is the 2018 Census, which contains data on migration flows to the 100 largest U.S. metropolitan areas. One of the major reasons for New York’s shrinkage is the advent of digital technology. At one time, in order for you to “make it” in banking, finance, media, advertising, fashion or publishing, you had to be in New York. With technology, you can work from anywhere in the world. Don’t turn off the light on New York City just yet, though. The city is also experiencing a wave of international migrant arrivals. In fact, from July 2017 to July 2018, the city welcomed nearly 100,000 net international migrants while it was saying goodbye to close to 200,000 New Yorkers. Chicago is another city that has seen an exodus of approximately 161 residents per day, however this includes the surrounding metro area. Downtown Chicago still remains a powerhouse in attracting major employers. The urban vibe of the downtown, especially the West Loop, is attractive to employees as well. The University of Chicago was recently #6 in the US News and World Report’s ranking of Best Colleges. The talent pool afforded by this and other universities in the city do meet a need for tech-centric firms that are looking for top-tier talent. Of course, all of these exodus people have to move somewhere, and they’re generally going to secondary markets, where the cost of living is easier. Austin, Dallas, Phoenix, Tampa, Orlando, Atlanta and Las Vegas are welcoming scores of new residents, as a result of both domestic and international migration. These seven cities alone average more than 100 new arrivals every day. Houston and Miami are in the 8th and 9th spots in welcoming migrants, and rounding out the top ten in new destinations is Seattle. Reasons for the exodus are not surprising: high home prices, local taxes, and a lower quality of life. Reasons for the exodus are not surprising: high home prices, local taxes, and a lower quality of life. No doubt, businesses and major corporations are following the flow in order to retain a high-quality workforce. Financial firms, for instance, are digging their heels into states like Florida, North Carolina, Texas, Arizona and Tennessee. Blake Williams, director of research at the Ettain Group, based in Durham, North Carolina, tells Forbes , “Raleigh and Charlotte, North Carolina, are booming. New companies and people are moving here all the time.” He adds, “I’ve read that 80 people a day are moving into Raleigh-Durham. You can easily buy a three-to-four-bedroom home, with a short commute to work, for about $300k to $400k. The same house in New York or New Jersey would be twice that amount. Real estate taxes are roughly $1,200 a year and it’s over 10 times higher for my clients who live in New Jersey. We have tech, banking and all sorts of companies moving here.” Interestingly, what’s not included in these migration figures are “natural” increases in city population, which is usually calculated to equal the difference between the number of live births and the number of deaths in a given city. In the top ten that we’re examining, deaths actually exceed births. So these cities would show decreasing populations if it weren’t for migration. International migrants are moving in a big way to Miami, with an addition of 93,000 residents. The international crowd then favors Los Angeles, Houston, Boston, and Washington, D.C., in that order. For those domestic migrants, Phoenix seems to be the promised land these days, surpassing the old leader, Dallas. More than 62,000 domestic migrants moved to Phoenix between July 1, 2017 and July 1, 2017. During that time, Dallas received 46,000 domestic migrants. Rounding out the top five for this category: Las Vegas, Tampa and Austin. Domestic migrants are also streaming into Colorado Springs, Boise, Charleston and Las Vegas, reportedly more than 10 times as many as international migrants. United Van Lines also keeps tabs on where the people are flowing, by state. The company reports that three states are losing the most people — New York, New Jersey and Connecticut. Yep, all three in the Northeast. New York may be the city with the biggest exodus, but according to United Van Lines, the state with the biggest loss of residents is New Jersey. It’s 42nd Annual National Movers Survey finds that 66.8 percent of all the moves in New Jersey are out of state. The state with the most inbound migration is Vermont, at 72.6 percent, followed by Oregon, with 63.8 percent inbound moves. At KBS, we’re following these migration trends, and always seeking office space in markets with the highest demand. We believe that investing in the strongest markets helps reduce investor risk, and we aim to be flexible in our strategy when the stats change. We are sure to work with the best third-party real estate firms that provide the highest quality property management and leasing services. This also helps to give us the leverage to work with the very best professionals at all times. Click here to check out all of our KBS assets across the country. Marc DeLuca is the Eastern Regional President for KBS, overseeing four asset managers and a portfolio of assets totaling over 11.0 million square feet.