According to the National Association of Realtors latest monthly Commercial Market Insights report, these are the best performing U.S. commercial property markets in Q3, 2021 (in alphabetical order):
NAR analyzed 390 commercial real estate markets and found a robust recovery with positive net absorption and strengthening rents across the multifamily, industrial and retail property markets as economic production rebounds to pre-pandemic levels. The apartment and industrial sectors, specifically, are reporting historically low vacancy rates, while retail has undergone a more gradual recovery as consumers continue their return to brick-and-mortar shopping.
The office sector, however, continues to struggle, as absorption rates and rents have declined and many occupied spaces remain largely void of workers. Positive indicators have been noted in small- and medium-sized metropolitan areas, which are seeing increases in office occupancy rates that outperform most large cities and the national average.
"Even as the economy makes a steady recovery, the one sector still lagging behind has been the office market," said NAR Chief Economist Lawrence Yun. "Work-from-home flexibility looks to be the defining shift of the new post-pandemic economy.
"Despite the overall challenges, however, some local markets are bucking the trend with more office occupancy and rising rents. A combination of strong in-migration and relatively lower cost of doing business is driving these growth markets."
NAR unveiled the top office markets today as part of its inaugural C5 Summit in New York City. C5 - Commercial. Connect. Commerce. Capital. Community. - brings together commercial investors and influential industry leaders, including commercial brokers and developers, state and local Realtor® associations, economic development corporations, government officials, REITs, and domestic and international investors.
"C5 is the nation's top gathering of commercial real estate and economic development professionals," said NAR President Charlie Oppler, "Commercial real estate plays a vital role in stimulating the economy and revitalizing communities. Whether it's sales, property management, financing or development, C5 will help facilitate important investment and partnership opportunities."