The commercial real estate sector is on the path of robust recovery, according to new data from the National Association of REALTORS® (NAR) that analyzed 390 commercial markets, finding positive net absorption and strengthening rents across the multifamily, industrial and retail property markets as economic production rebounds to pre-pandemic levels.
While the apartment and industrial sectors are experiencing historically low vacancy rates, retail reports a more gradual recovery as consumers make their way back to in-person shopping.
One area suffers, however. Office absorption rates and rents have declined and many occupied spaces are largely empty due to a lack of workers. Small- and medium-sized metropolitan areas, however, are experiencing increases in office occupancy rates, outperforming the national average and most large cities.
“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 in a statement. “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,” added Yun. “A combination of strong in-migration and relatively lower cost of doing business is driving these growth markets.”
As part of NAR’s C5 Summit, held in New York City, the association unveiled the top office markets:
- 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
“C5 is the nation’s top gathering of commercial real estate and economic development professionals,” said NAR President Charlie Oppler in a statement. “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.
For more information, please visit www.nar.realtor.