"The Third Coast"
or, why I like commercial real estate in the Rocky Mountain West

My focus as a commercial real estate investment specialist has been primarily on properties in the Rocky Mountain area. There's a good reason for this.

A major demographic pattern emerged in the late 1990s and is continuing unabated today. Previously, net in-migration was focused mainly in California in the west, and Florida in the east, as well as major metropolitan areas in the west such as Seattle, Denver and Dallas. In the late 1990s, in-migration to those areas lessened, and instead spread to areas in and near the Rocky Mountains. The Intermountain West became one of the fastest-growing areas in the nation. Most interestingly, this net in-migration spread to the smaller, non metro areas of Montana, Utah and Idaho. The red areas show net in-migration, the black, net out-migration.

This population growth through net in-migration is strongly associated with “high amenity” areas, including areas near National Forest lands and National Park lands. Study after study indicates this migration pattern is steering more and more people to areas high in environmental amenities and quality of life. This growth is sustained by the economic growth of these areas as well. The fastest growing sub-sectors are shown here:

Fast-Growing Sub-Sectors (in 2000 dollars)
 

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Notice also the growth in health services, which logically is accompanying the growth in the boomer population in this area. Growth in "special trade contractors" proceeds from the need for new housing and businesses. The last element in the shift is the aging population, a group more amenable to relocating, and one with an expansion of personal income from non-labor sources - that is, more transportable income sources.

In conclusion, there is a strong net in-migration to the intermountain west. It is driven by an older, mobile, professional population looking for environmental amenities and a higher quality of life. They move from the left and right coasts, creating their own local employment, or bringing their non-labor wealth and income. For investors, this trend is a strong indicator of the current and future strength of investing in the intermountain west.