If you drive around New Haven these days, you will see building after building that is being renovated, remediated, or repurposed. Many of them have been bought by investors that can no longer afford the prices commanded by properties in New York City or Boston. Once someone makes his or her first purchase, there is a good chance that he/she will continue to buy other offerings, especially given the prices on some of the older industrial buildings. In addition to the lower acquisition costs, it's also cheaper to renovate here than in a bigger city.
Some of these purchases are being driven by the desire to diversify investments, while some are opportunistic, and others are for specific purposes. The rash of new rental options will inevitably lead to other retail and commercial needs in those neighborhoods. There will be money made, as early adopters get ahead of the curve. Organizations and companies that are renting should consider now the possibility of buying, before prices rise further, even though current rental rates may seem like (and often are) a bargain.
What does this mean for those of us who live here? Will we continue to watch as others grab what's on the market? Or will we make the classic mistake of sitting on the sidelines until it becomes so clear that outsiders are making money, that we buy at the end of the cycle, or buy something that is more problematic or risky? Only time will tell, but it's our job to point this trend out, and the job of readers to think about their own portfolios.