The National Association of Realtors released a new index designed to forecast commercial real estate demand by analyzing economic conditions across more than 300 metropolitan markets in the United States. The index ranks regions separately for office, industrial, retail, and multifamily property sectors, using government data on employment, population, and migration patterns to assess future demand potential.
South Carolina emerged as the top-ranked state in the index for overall commercial real estate demand. The methodology incorporates sector-specific metrics, including professional and business services employment growth for office properties, manufacturing and transportation employment for industrial assets, retail trade and leisure employment for retail properties, and population growth plus net migration figures for multifamily housing. These measures are combined into a composite index that aims to serve as a predictive tool for investors.
According to the index, Raleigh, North Carolina, stands as the only major U.S. market currently stronger than it was in 2022, when pandemic-era migration peaked. Conversely, previously robust markets such as Austin, Miami, and Naples have experienced significant declines since that benchmark year. St. George, Utah, topped the index overall, driven partly by the nation’s strongest office employment growth alongside robust population gains and above-average industrial demand.
Research directors at NAR noted that smaller and midsized metropolitan areas may present compelling opportunities for investors, citing examples including Fayetteville, Arkansas; Huntsville, Alabama; and Spartanburg, South Carolina. Huntsville notably ranks among the highest for multifamily sector strength. Additional regional leaders in specific sectors include Salem, Oregon, and Fairbanks, Alaska, for industrial properties. Broader market trends show that large coastal markets like New York and San Francisco continue to underperform compared to rapidly expanding Sunbelt regions and smaller metropolitan areas tracked in the index.
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