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Key Highlights
- Half of the top 10 commercial office markets are in Florida (Daytona Beach, Miami, Palm Beach) and Texas (Austin, San Antonio). Boise, Chattanooga, Myrtle Beach, Omaha and Provo round out the list.
- Since the second quarter of 2020, vacancy rates have declined for apartments/multifamily, industrial and retail properties.
- Compared to one year ago, asking rents climbed for apartments/multifamily (11%), industrial (7%) and retail (2%) properties, but declined for office properties (-0.4%).
NEW YORK (September 27, 2021) – The National Association of Realtors® identified the top 10 commercial office markets as of the third quarter of 2021 in its monthly Commercial Market Insights report released Monday. In alphabetical order, the markets are as follows:
- Austin, Texas
- Boise, Idaho
- Chattanooga, Tennessee
- Daytona Beach, Florida
- Miami, Florida
- Myrtle Beach, South Carolina
- Omaha, Nebraska
- Palm Beach, Florida
- Provo, Utah
- San Antonio, Texas
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, a Realtor® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby's International Realty. "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."
View NAR's latest Commercial Markets Insights report here: https://www.nar.realtor/commercial-market-insights/september-2021-commercial-market-insights.
The National Association of Realtors® is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
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