Howdy y’all, Luke Crawford here, I recently came across an article in the Wall Street Journal that discusses how Wall Street is betting against America's Downtown areas.

Although I haven't had many opportunities to visit other Downtown areas post-COVID, I will say that Downtown Atlanta seems devoid of life.

A few months ago, I had a meeting Downtown and in order to avoid the morning traffic, I arrived at the Chick-Fil-A in Peachtree Center by 6 AM. During the hour or so that I spent there, I was amazed by the lack of foot traffic. Peachtree Center felt like a ghost town, with numerous retail stores and restaurants closed down. Interestingly, I don't recall seeing a single person dressed in a suit, heading toward a business meeting like I was.

Here is a quick summary of what the Wall Street Journal makes of the issue:

Investor confidence in downtown areas across America is declining, impacting city finances and residents. The rise of remote work has led to falling prices for downtown-focused investments and commuter infrastructure. This blog post examines the challenges faced by downtowns and the potential opportunities in suburban areas.

Financial Strains and Austerity Measures: Downtowns contribute significantly to city revenue, but with remote work on the rise, tax revenues from property and commuting are decreasing. Cities are considering austerity measures, leading to reduced services and rising budget gaps.

The Shift to Suburbs: Suburban areas are becoming more attractive as companies and workers embrace remote work. Job growth and relocations to lower-tax states are benefiting suburban economies while impacting downtowns.

Impact on Property Values and Taxes: Downtown office space values have declined, and some property owners are challenging tax assessments. This poses a dilemma for cities: collect less revenue or burden other taxpayers.

A Cautionary Outlook: Real estate investment trusts (REITs) focused on downtown office buildings have experienced share price declines. However, cities are not going bankrupt, and there are pockets of resilience in other sectors.

Looking Ahead: Cities must adapt to the changing landscape. Data analysis, such as monitoring cellphone activity, helps identify investment opportunities in suburban areas.

Conclusion: Downtowns are facing challenges due to remote work, affecting city finances and residents. However, the shift presents opportunities in suburban areas. Adapting to these changes will be crucial for cities to thrive in the future.