Commercial Real Estate Finance

Happy 4th of July!

In a Top 10 List that’s at least vaguely linked to this national holiday, here’s a list of the Top 10 Most Historic U.S. Cities:

10. Savannah, Georgia. This is the state’s oldest city, established in 1733.

9. San Antonio, Texas. Established in 1718 around the Alamo Mission, the future location of the city was first visited by the Spaniards in 1691.

8. New Orleans, Louisiana. Surprisingly, most of the famous historic architecture you see in this unique city is of Spanish pedigree despite its more common association with the French.

7. Charleston, South Carolina. Established in 1670, although a little northwest of the present location, today’s city was built starting in 1680.

6. Philadelphia, Pennsylvania. The official founding of the city as we know it today began with William Penn’s 1682 ambitious grid-layout that still marks the modern foundation of the city’s planning. However, a little know fact is that there were colonists who inhabited parts of what is today’s Philadelphia as early as 1637.

5. New Castle, Delaware. New Castle dates to 1651, when it was founded as an outpost of the Dutch West India Company…

4. Annapolis, Maryland. Founded in 1649 by Puritan exiles.

3. Boston, Massachusetts. Boston traces its beginnings to 1630 when Puritan colonists arrived from England.

2. Santa Fe, New Mexico. It took a few tries to get this city permanently established in 1608… but the good location was no secret to the Pueblo Indians who had occupied the area from 1050 to 1150.

1. St. Augustine, Florida. Founded by the Spanish in 1565 St. Augustine is the oldest European-founded city in the United States (continuously inhabited).

This list, with full descriptions you can view here, obviously has a narrow definition of “historical.” When we’re speaking of “historical places” in this discussion what we really mean are the longest continuously occupied, largely urban, and (let’s be honest) European-founded cities in America. If we really want old, there are Pueblo settlements that predate the Magna Carta, let alone European colonists.

In any case, we’re here to talk about commercial real estate. The historical identity and features of American cities have a significant impact on its real estate market. Historical significance is a huge driver when it comes to tourism and hospitality real estate, so it’s no surprise that cities like Philadelphia and Boston rely heavily on this image in marketing themselves (though markets as large as these must rely on far more than their importance in the colonial and revolutionary eras; that only goes so far).

However, a wealth of historical sites creates challenges for CRE developers and investors. Historical properties often come with protected status on the National Register of Historic Places, not to mention local ordinances, which can be extremely restrictive for those attempting to update or reposition a property. This is the challenge in such markets: creating value for a given location while working to preserve that cobblestone walk where George Washington reputedly once buckled his shoe (or something…).

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