Growing Hispanic Population Fuels Growth In Retail & Multifamily Sectors.

The growing Hispanic population promises to have a major impact on retail demand and housing choices in the United States, providing real estate investors with substantial investment opportunities in both sectors, according to The Rising Influence of the Hispanic Population on U.S. Real Estate, a newly released report from Prudential Real Estate Investors (PREI(R)). PREI is the real estate investment management and advisory business of Prudential Financial, Inc.

“The Hispanic population is a young, large and fast-growing group united by a common language and ancestry,” said Youguo Liang, managing director of research for PREI. “Towns and urban areas are gradually incorporating cultural characteristics of Latin American heritage and urban planning, while the growth of the Hispanic population’s disposable income further enhances their influence in all sectors of the U.S. economy.”

Hispanic-focused investments remain a niche play, but with predictions that one in every two new Americans will be Hispanic, the growing population will affect all market participants. “Strong pent-up demand already exists for Hispanic-focused retail and housing,” Liang said.

This year, according to the U.S. Census Bureau, Hispanics totaled about 14 percent of the U.S. population, two percentage points higher than the share of African-Americans–the second largest minority group. Today, the U.S. Hispanic population is equal to 40 percent of Mexico’s entire population and has surpassed Spain’s population. According to the report, within five years the U.S. Hispanic population could be larger than the combined populations of Spain and Portugal–the origins of Latino culture.

The growth of the Hispanic population, which includes people of Mexican, Puerto Rican, Cuban, South or Central American or other Spanish culture, is also reflected by their rapidly rising aggregate disposable income, according to the report. This year, U.S. Hispanics are expected to control $736 billion of disposable income–a number that the Selig Center for Economic Growth estimates could balloon to $1.1 trillion by 2010.

That growing economic strength provides opportunities for retailers in the largest markets, where large Hispanic neighborhoods are underserved by current retail establishments, PREI said. With the current rates of population growth, those markets could be even further underserved in the future.

Within housing markets, Latino styles and tastes are redesigning existing structures and influencing plans for new developments, particularly in such states as California and Texas, the report said. Additionally, the report–citing surveys of Latino housing preferences–said Hispanics often prefer living in compact, mixed-use neighborhoods that allow for more social interaction. Those inclinations provide opportunities in the housing sector, the report said.

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