NAR: America’s Top 10 Commercial Office Markets of 2021
Of the top 10, three are in Fla. NAR says it 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.” However, the office sector continues to struggle.
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 – The National Association of Realtors® (NAR) identified the top 10 commercial office markets as of the third quarter of 2021 in its monthly Commercial Market Insights report released Monday, and three of those top markets are in Florida.
In alphabetical order, the markets are:
- 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
To determine the top 10, NAR says it analyzed 390 commercial real estate markets. Overall, it found a robust recovery with positive net absorption and strengthening rents across the multifamily, industrial and retail property markets, as economic production rebounded to pre-pandemic levels. The apartment and industrial sectors, specifically, have historically low vacancy rates, while retail underwent a more gradual recovery as many consumers return to brick-and-mortar shopping.
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%).
The office sector, however, continues to struggle. Absorption rates and rents have declined, and many occupied spaces remain largely void of workers. Still, NAR says it found some positive indicators 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,” says 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 – which stands for “Commercial. Connect. Commerce. Capital. Community.” – brings together commercial investors and 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,” says NAR President Charlie Oppler.
NAR’s latest Commercial Markets Insights report is posted on its website.
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