Alex Deitch on Why the Next Corner Is at the Edge of the Metro

Most of the people moving to the South are not moving downtown. They are moving to the edge of the metro. That is where I want to own the next corner.

The Census Bureau said it plainly in June. Between April 2020 and July 2025 the South grew 6.0 percent, nearly double the nation's 3.1 percent. The outlying counties of the South's metro areas grew 10.7 percent. The central counties grew 6.1 percent. "The South's growth from 2020 to 2025 has been particularly prominent in its metro areas' outlying counties," said Lauren Bowers, chief of the bureau's Population Estimates branch. The bureau's own summary: growth in metro areas since 2020 "has largely been in the exurban areas on their outer edges."

The families are on the edge

The age detail is the part I read twice. Per the bureau's tables, the South's outlying metro counties added 16.0 percent more people aged 25 to 44 over those five years. The central counties added 8.9 percent. Children under 18 grew 6.5 percent on the edge and 0.7 percent in the core.

That is the drive-thru customer. A household with a car, kids and a commute. Coffee in the morning, dinner on the way home, an oil change on Saturday.

The core city is slowing

The May city release says the same thing town by town. Charlotte added 20,731 people last year, more than any city in the country. By rate, it was only the seventh fastest-growing city in its own metro. Fort Mill, S.C., about 20 miles from downtown, grew 6.8 percent, to 38,673. Every city in the metro that outgrew Charlotte had between about 25,000 and 70,000 people. The bureau also reports that among the largest cities, average growth rates fell by at least half in every region from a year earlier, the South included.

North Carolina reads the same way. Carolina Demography at UNC reports that the state's three fastest-growing towns last year were all small towns in one metro, none of them its core city. Almost half of the state's 50 fastest-growing cities and towns sat in that same metro area.

How I use it

I would rather be in the town on the growing edge of a metro than in the dense node at its center. The infill corner is already priced for the tenant on it today. The edge town is where the brands open next, and the land price has not caught up.

Growth alone does not make a market. Rooftops are not a trade area. Before I look at a single corner in an edge town, I want three things:

• Real anchors. A Walmart Supercenter, a Lowe's, a Home Depot, a Target. A town whose only big box is a small-format grocery store is not a market yet, however fast the subdivisions fill.
• The node, not the road. The pad sits among the retailers, between the big boxes, on the corridor that carries their traffic. The same road a mile past the last anchor is a different site.
• A signal. A corner or signalized access from the spine, with room for a drive-thru line. In a small town, a side street off the main light does not work.

It also has to be the edge, not the shadow. A town that is really infill for the big city, built out and priced like it, is the core under another name. The test is not the town's size. It is whether the town is still adding the people who will shop there.

What I am watching

The next round of county and city estimates. I want to see whether the outlying counties keep their lead now that big-city growth has slowed. And I watch which edge towns land their first big box. That is the day an edge town becomes a market, and I want the corner next to that box before it opens.

Alex Deitch is the founder and principal of Falcon Realty Partners in Atlanta.