Investing in Front of the Path of Growth

by | May 3, 2022

Here at Sage, we are hyper-focused on investing in front of the path of growth.

This simple economic belief is based on the premise that having more potential people in a specific market tomorrow means more potential demand for products in that market. Whether it’s the demand for storage units, apartments, retail shopping, or food, more buyers mean more demand. Thus, we are hyper-focused on choosing our geographic locations for investing to be in front of leading growth markets. These markets include but are not limited to states like Colorado, Utah, Arizona, Texas, Georgia, and Florida, which some economists call the smiley face of America. Each of these markets supports warm weather year-round, low costs of living, and significant economic climates with pro-business local governments and tax rates. Every year, the net migration of new people to these markets is staggering. For example, Texas alone experiences a net migration of more than half a million people per year.

Another way to look at population growth trends is by acknowledging that America has more than 331 million people living in the US today. Our population is growing at around 0.9-1% per year, or 3.2 million people. This statistic shows only documented population growth and doesn’t include the undocumented, making the number that much higher. If you take that growth rate over a period of ten years, it adds to roughly 30 million new people in America. That’s the same size as the cities of Dallas, Ft. Worth, and Houston combined, times two. In turn, you must now ask yourself: where are all those roads, buildings, hospitals, schools, and homes going? Are they going to show up in a city or state experiencing no population growth? Or are they going to show up in a city or state with massive population growth, like Texas or Florida?

The goal is to own assets directly in front of this growth and let the population trends be the tailwind to our underlying tenants and, ultimately, our real estate value.