Toronto Part 2 – Global Might
The reason for my mid-fall visit to Toronto was to present research on office and industrial space markets to the NAIOP Research Foundation Board of Governors and NAIOP National Forums meetings. For those interested in such topics, head over to NAIOP’s website and click on research for more details. One of the central questions being asked at this conference (and being addressed in the research) is how will global forces impact demand for commercial real estate in the United States.
I’ll just go to the answer, it HUGELY impacts demand for commercial real estate in the US (as well as the overall macro economy, jobs, etc.). Cities are growing and people are working more (these are just the stats, no arguing at this point) in large part due to increasing levels of global connectivity and global trade. Toronto is a city that has a mixture of global business trade and industrial production and is growing because it is connected to the world. This photo shows this mixture quite well, a diesel locomotive front of the a modern cityscape. Yes, Toronto is a rail and shipping hub, that’s why it was built! I know shocking, but people did not move there for the weather. Toronto is also an air hub, as you can fly to pretty much everywhere from Toronto Pearson International Airport.
Thus, beyond showing of these cool nighttime photos of Toronto, I wanted to leave this simple lesson on urban economics. Cities form and grow based on trade and industry. When water transport was the dominate means of transit, port cities grew first (i.e. New York City and Philadelphia). When rail became a dominate means, rail hub cities were created (i.e. Kansas City and Denver). When air travel became a dominate means, Aerotropoli (air hub city) began to grow (i.e. Dallas/Ft. Worth, Los Angeles, Washington/Dulles and hopefully Orlando). In short, watch how people and goods move and you can see where growth will occur.
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