Gentrified Urban America Will Be Hit Hardest By The Recession

Zero Hedge | 1/22/2019 | Staff
vpp1219 (Posted by) Level 3
Click For Photo: https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/max_650x650/public/2019-01/income-real-quintile7-17a.png?itok=s-9pElwU

Combine sky-high commercial rents in homogenized, gentrified urban areas and sharp declines in the incomes of the limited populace who can afford gentrified urban areas and what do you get?

A number of macro dynamics have set up gentrified urban America for a big fall in the coming recession. What does gentrified mean? Gentrified means only the gentry (top 10%) can afford to enjoy the urban amenities as commercial rents and the cost of doing business in desirable urban areas have skyrocketed along with residential rents.

Result - Businesses - Neighborhoods - Residents - %

As a result, low-margin businesses have been squeezed out of desirable urban neighborhoods along with lower-income residents. The top 10% is the only demographic who can afford to live in gentrified urban America.

As noted in What’s Really Happening to Retail?, Only Amazon-proof businesses can now survive in brick and mortar. And that quickly boils down to high-cost, high-margin food and drinks--cafes, bars, restaurants-- and mega-corporate chains: Walgreens, Starbucks, Chipotle, etc. and smaller chains that cater to the needs/obsessions of the top 10%: fitness centers, etc.

Stock - ETF - Analysis - Analysis - Metrics

FREE stock and ETF analysis like you've never seen! A full analysis of 8 key fundamental metrics.

FREE stock and ETF analysis like you've never seen! A full analysis of 8 key fundamental metrics.

Per - Capita - Basis - America - Estate

On a per capita basis, America is grossly over-supplied with commercial real estate. But within the desirable urban cores, commercial rents have soared due to the relative scarcity of commercial space. As a result, landlords and property managers are asking exorbitant rents, and many are leaving spaces empty rather than rent them for less.

The net result is desirable urban zones are being homogenized: niche retailers and other small service providers can no longer afford the rents (unless they also own the building) and the only businesses that can afford the nosebleed rents are high-margin food-beverage establishments or corporate chains.

Irony

The irony...
(Excerpt) Read more at: Zero Hedge
Wake Up To Breaking News!
Don't believe everything you think...
Tagged:
Sign In or Register to comment.

Welcome to Long Room!

Where The World Finds Its News!