What Is an 18-Hour City

An 18-hour city is a second-tier city with higher-than-average urban population growth and featuring a lower cost of living and lower cost of doing business than first-tier cities. In real estate investing, 18-hour cities are seen as viable investment alternatives to the "big six" markets of Boston, Chicago, Los Angeles, New York, San Francisco and Washington, D.C. — most of which are often dubbed 24-hour cities.


While loosely defined, the term "18-hour city" most often refers to a secondary real estate market that offers services, amenities and job opportunities comparable to those in the big six markets but without operating on a 24-hour basis. These cities typically feature widespread urban development, a solid public transportation infrastructure, a strong economy, and moderately priced housing.

For real estate investors, 18-hour cities have emerged as a more affordable investment option than larger markets with higher prices that can compromise yields. These cities are attractive because they typically feature lower capitalization rate compression, meaning property values tend to remain stable rather than spiking up or down significantly. Like first-tier cities, however, 18-hour cities often boast low vacancy rates, along with favorable supply concentrations, rent growth, and absorption trends — all indicators of long-term real estate investment returns.

One potential downside, however, is the increased degree of risk associated with 18-hour city investments because they do not have the established track record of primary market cities.

Examples of 18-Hour Cities in the U.S.

In a research note for the third quarter of 2017, real estate firm JLL reported that despite broader market declines in real estate investment activity, secondary markets saw the largest share of overall investment since 2009, with Dallas and Atlanta leading activity.

Growth and interest in 18-hour cities typically spike when the broader economy experiences robust growth. For example, 18-hour cities such as Seattle, Portland, Orlando, and Salt Lake City were all considered among the fastest-growing U.S. cities in 2017. As of January 2018, these cities are also projected to perform well with regards to job growth, wage growth, and home price growth, outpacing much of the rest of the nation.

Meanwhile, cities such as Charlotte, Seattle, Denver and Portland — and other commonly cited 18-hour cities — have become targets for millennials whose goal is launching or advancing their career. 18-hour cities are often characterized by the availability of recreation and entertainment opportunities that extend beyond what the typical suburban city affords. Employers are drawn to 18-hour cities because doing business is less expensive in these markets and this, in turn, attracts large numbers of job seekers and entrepreneurs.