In the last few decades, many U.S. cities have invested heavily in public transit systems. Between 2010 and 2019, cities across the U.S. added over 1,200 miles of new and expanded transit service to accommodate growing populations and our current environmental landscape. Many urban communities have also invested in public transportation amenities and improvements in transit quality, including frequency and speed of service. How does this impact commercial real estate today?
What Effect Does Proximity to Public Transportation Have on Commercial Real Estate?
Commercial Real Estate Property Value
According to a joint study from the American Public Transportation Association (APTA) and the National Association of Realtors (NAR), property values of commercial buildings increase dramatically when close to transit. In four of the seven metropolitan regions the study explored, commercial property values saw an increase in median price per square foot by between 5% and 42%. Commercial real estate market sales thrive when residents and commuters have mobility options nearby, including buses, metros, and subways.
Commercial Tenant Attraction
Commercial real estate properties located within close proximity to public transportation are becoming more and more attractive to tenants. These commercial properties are typically centrally located and give commuters access to multiple transportation modes, which is a huge advantage for both employers and employees!
Office tenants, especially, are looking for convenient and walkable locations that grant employees an accessible commute, as well as quick and easy access to local dining, retail, fitness centers, and entertainment. Retail tenants gain higher visibility near public transportation routes and high-pedestrian areas, giving them the opportunity to gain new clients and potential customers that pass by. Businesses within close proximity to public transportation are also contributing to a more eco-friendly environment for their city!
As urban development expands and urban living becomes increasingly desirable, proximity to public transportation will continue to play an important role in the commercial real estate market.