Why Smart Capital Is Flowing to Emerging Metros Like Des Moines

While high-interest rates and economic uncertainty have prompted many investors to reassess their portfolios, one trend has remained remarkably consistent: the strategic migration of capital toward emerging metros. Cities like Des Moines, Iowa — often overlooked in previous cycles — are now emerging as some of the strongest performers in the Midwest, thanks to population growth, affordability, and resilient fundamentals.

At Hammer & Hampel, we’ve experienced this shift firsthand through our expanding portfolio in Central Iowa, including The Drake, Chetwynd, Pioneer Estates, The Grove at Hickman, and Forest Avenue Village. Our presence in Des Moines has grown in step with rising investor interest, allowing us to capitalize on both acquisition opportunities and operational efficiencies across the region.

Des Moines isn’t just growing — it’s leading. According to recent data from CoStar, Des Moines led all Midwest markets in population growth in 2024, with a 2.3% increase. This demographic momentum, fueled by job creation, affordable housing, and quality of life, is driving increased demand for rental housing across the metro area. The influx of new residents is putting steady upward pressure on occupancy rates and rental values — trends that are especially attractive to multifamily investors seeking long-term, sustainable growth.

It’s not just organic growth that makes Des Moines appealing. The metro continues to receive national recognition for its business-friendly climate, high quality of life, and strategic investment in infrastructure. With a diverse economy anchored by insurance, logistics, health care, and technology, Des Moines offers a resilient economic base that’s increasingly drawing institutional capital. Its affordability, low unemployment rate, and steady stream of young professionals — especially around hubs like Drake University — create a strong foundation for long-term multifamily investment.

Forest Avenue Village, our newest addition to the Des Moines portfolio, exemplifies this momentum. The 50-unit, recently renovated community was built in 2017 and benefits from tax increment financing (TIF), offering attractive long-term economics. Its location just minutes from Drake University provides both leasing velocity and access to an expanding renter pool. In-place demand drivers such as walkability, access to educational institutions, and connectivity to downtown further enhance its competitive positioning.

According to CoStar, the Des Moines metro experienced 2.3% population growth in 2024—ranking first among Midwest metros. Much of that growth has been concentrated in suburban nodes like Ankeny, Altoona, and West Des Moines, where proximity to downtown and new development continue to attract new residents. With over $500 million in planned infrastructure and civic investment throughout the metro, Des Moines is positioning itself as a top-tier market for both residents and real estate investors alike.

From a capital deployment perspective, markets like Des Moines offer an opportunity to stretch investment dollars further while still targeting assets in well-established, economically sound environments. Compared to coastal metros, the Midwest remains attractive not only due to higher relative cap rates, but also due to lower volatility, more favorable landlord-tenant laws, and the opportunity to generate stable yields in well-managed properties. Investors who have traditionally focused on major gateway markets are increasingly expanding their scope to include places like Des Moines — not just as a hedge, but as a strategic priority.

For investors looking to navigate today’s uncertain environment, emerging metros like Des Moines offer a compelling path forward. By targeting areas with real economic drivers and sustainable growth, we’re able to pursue opportunities that balance upside potential with downside protection. We believe markets like Des Moines will continue to attract attention for their fundamentals, community planning, and relative affordability — positioning them well for both short-term momentum and long-term success.

If you’re interested in learning more about investing alongside us in Iowa, visit our website hammerandhampel.com