Let’s use cybersecurity as an example of how the changes in business tech are influencing real estate. Tech industries like cybersecurity provide a massive number of jobs around the District. Heavy hitting companies like General Dynamics and Boeing paired with the plethora of government agencies such as the NSA and US Cyber Command depend on a large (and growing) workforce of cyber professionals. In fact, DC currently holds the most concentrated demand for cybersecurity professionals in the country. And on a broader scope, according to CapRelo, there are roughly 40,000 tech jobs currently available throughout the DMV. That’s a whole lot of people who need housing.
On top of the influx of tech professionals, businesses are changing the way they approach hiring and conducting their day-to-day operations. Working from home (at least part of the workweek) has become increasingly popular in tech-based industries since much of the work is just as effective when done remotely. WCP may not be a “tech-based” business by definition, but our whole IT Team works remotely from Tulsa, Oklahoma! Having personnel work from home also reduces operational costs for businesses and is associated with a boost in employee morale. And when well-paid tech pros work from home, they need modern amenities and tech-savvy features. This demographic is simply not going to settle for outdated housing. Would you want to spend your entire day in a sub-par living space? Probably not.
With a lack of undeveloped space in DC and its closest suburbs, multifamily properties are becoming more and more popular for developers (why build out when you can build up?). The rise of the tech demographic presents the perfect opportunity to rehab existing properties to modern, tech-savvy units. This demographic tends to prefer features and location over square footage, so investing in a multifamily property, or even a condo conversion opportunity can result in a bigger payday for you as an investor.
The trend of condo conversions has become greatly popular among DC-area investors as the demand for multifamily grows in neighborhoods that primarily offer single-unit properties. Purchasing a single-unit property and either dividing the existing space into multiple units or building additional space (typically by adding floors) is a great way for experienced rehabbers to see bigger paydays after construction is complete. (Check out our blog on DC condo conversions!)
So with an influx of tech professionals seeking updated multifamily properties, it’s a great opportunity for rehabbers to switch gears from the typical single-family flip.