Des Moines is an emerging city with lots of investment potential. With a population of over 200,000, it is the largest city in Iowa and serves as the state’s capital and cultural center. Des Moines has seen strong economic and population growth in recent years, making it an attractive place for investors. There are many promising investment opportunities across different sectors like real estate, technology, finance and more. Des Moines is home to major insurance and financial companies like Principal and Wells Fargo. It also has a growing startup and tech scene, led by organizations like Gravitate Valley and the Global Insurance Accelerator. The quality of life, low cost of living, and business-friendly environment make Des Moines a top city for investment. This article will explore the top investment prospects in Des Moines across real estate, startups, and more.
Robust Job and Population Growth Driving Real Estate Demand
Real estate has been a hot area for investment in Des Moines thanks to the city’s strong job and population growth. Major employers like Principal Financial, Wells Fargo and Nationwide Insurance continue to add high-paying jobs, bringing new residents. Des Moines’ population grew over 13% from 2000 to 2020. This influx of new residents and professionals has driven up demand and prices for housing. Total home sales in 2021 hit a record $4.67 billion, up 17% from 2020 according to the Des Moines Area Association of Realtors. Rising demand combined with low inventory has pushed up home values. This presents opportunities for real estate developers and investors to build new housing and commercial space. Popular areas for development include downtown and the East Village which have seen lots of new apartments, condos, shops and restaurants built recently. With Des Moines’ economic momentum expected to continue, real estate will remain an attractive sector for investment.
Emerging Startup Ecosystem Creating New Opportunities
Des Moines has worked hard in recent years to foster an entrepreneurial environment and startup ecosystem. This has created new opportunities for investors looking to get in early with promising young companies. Organizations like the Global Insurance Accelerator, Gravitate Valley and Startup City Des Moines support startups through funding, incubation, events and more. Notable startups that have come out of Des Moines include agricultural drone maker Rantizo, fintech Dwolla and cloud security company Opera Solutions. Early-stage VC firm Next Level Ventures recently raised a new $50 million fund to invest in Midwest startups. The low cost of living and high quality of life in Des Moines can give its startups an edge in attracting talent. The city’s central location also provides easy access to major startup hubs like Chicago. As the ecosystem matures, Des Moines is positioned to birth more high-growth startups that offer big investment upside.
Value Investing Opportunities in Overlooked Sectors
While areas like real estate and tech get most of the attention, value investors can find opportunities in more traditional Des Moines industries. The insurance industry has long been a pillar of the local economy. But insurers like Principal face disruption from fintech innovations. Investors can find value plays in insurance stocks neglected amidst the tech hype. Agriculture and manufacturing are other core industries where savvy investors can find hidden gems. Deere and other equipment makers provide exposure to the strong Iowa farming sector. Manufacturers benefiting from reshoring trends are also worth a look. With less flashy industries, intensive research is needed to identify the most promising companies. But patient investors can earn outsized returns in overlooked sectors where valuations underestimate future performance.
Growth of Research and Financial Services Industries
In addition to the insurance presence, Des Moines has seen growth in other high-paying white collar sectors like research and financial services. Wells Fargo expanded staffing at its West Des Moines campus to over 5,000 employees. Citi announced plans in 2021 to open a new facility expected to create over 1,300 jobs. These new facilities help diversify the metro economy beyond insurance. Principal Financial and others have established research campuses to tap into the educated workforce. Finance and research firms are drawn by the high quality of life, low costs and central location that provides easy access to major hubs. The expansion of these sectors creates positive spillovers for other industries and opportunities for commercial real estate investors, service providers and more.
Des Moines offers promising investment opportunities ranging from real estate and startups to overlooked value plays in industries like insurance and agriculture. Its strong economic and population growth provide a positive backdrop across sectors. Investors who do their homework and deploy capital strategically can tap into the city’s upside.