Office job growth is correlated with demand for high-end apartments
Employment in high-salary jobs across markets is just one of many metrics CONTI tracks to determine where these best acquisition opportunities are. Many office-using jobs are generally paid well relative to other types of work, and so CONTI Capital keeps a finger on the pulse of employment performance in these sectors to foresee demand for high-end apartments across markets.
Office jobs span a wide variety of professions – not only professional and business services, but software publishing, broadcasting, government, legal services, accounting and administrative work, to name a few.
Relocations for work do catalyze migration to and from markets, which CONTI also monitors, but the primary reason CONTI is interested in employment in office-using sectors is the relative level of pay they offer. Most office-using jobs require some college education, and with that prerequisite often come higher wages than those found in retail or food service. A sizeable slice of office workers earn enough salary to be able to afford higher rents at apartment properties situated in desirable locales and offering a bevy of amenities – the class of properties CONTI acquires for our funds.
Nationally, employment in office-using jobs increased 4.8% year-over-year in April 2022, according to data from the Bureau of Labor Statistics. In March 2020, as the COVID-19 pandemic took a big bite out of the labor market, total employment in the U.S. declined by 14% – but office-using employment only fell by 8%, since these workers were able to work while quarantining at home. Similarly, office-using employment recovered all lost jobs as early as July 2021, whereas total employment levels only just recovered in April 2022.
Several of CONTI’s target markets in Sun Belt states are outpacing national growth in office-using jobs – the Dallas-Fort Worth metro, for instance, has seen employment in these types of jobs increase 9.2% year-over-year. Nashville is up 8.5% in office-using jobs, Orlando is up 8.1%, and Austin is up by a stunning 12.2% year-over-year. CONTI also monitors growth in these sectors from two, three and five years ago to keep an eye on longer-term employment patterns.
Per CONTI’s own analysis, these markets will continue to see high employment growth in these sorts of jobs. Five years out, we expect office-using employment in Austin to have increased around 12.2%, one of the highest forecasted growth rates of the metros we track. There will continue to be opportunities for professionals in Austin, creating more demand for housing while supply struggles to keep up.
CONTI monitors over a hundred leading indicators to keep a pulse on in-migration, quality of life, supply and demand fundamentals, municipal laws and other factors that matter when it comes to finding the best quality apartment assets to acquire into our funds.