When it comes to commercial real estate, not all markets are created equal.
That’s certainly no secret.
While everyone knows that cities like New York and San Francisco are CRE mainstays, however, there are actually plenty of other markets that present similar levels of opportunity to brokers and brokerages alike.
Many secondary and tertiary markets present stable, hotly-contested centers of industry with consistently low vacancy rates.
Others rely on on an up-and-coming atmosphere to attract working professionals, tenants, and investors.
So, if you’re an agent looking to move to a new market—or your brokerage is looking to open a new office in another market, where should you look?
We have nine suggestions for you (in no particular order)…
The 9 Best Cities for Commercial Real Estate Brokers
1. St. Louis, Missouri
St. Louis might not be the first city that comes to mind when you think of burgeoning commercial centers, but there’s a lot to love about this emerging market.
In fact, 2016 marked a record-setting year for commercial real estate in St. Louis, bringing with it the absorption of six million square feet of new commercial property.
The city’s office market realized record highs for asking rental rates in Q3 of 2019, and the retail market appears to remain steady.
St. Louis has also had many recent, ambitious tech-centric projects like the Cortex Innovation District—which has attracted major tenants like Microsoft, who opened their Cortex office in September 2018.
2. New York, New York
(Pictured above: A window-view from Reonomy’s very own NYC office.)
Second only to San Francisco in terms of cost per square foot and competition between high-profile tenants, New York has long been a reliable hotbed of CRE activity.
While the “concrete jungle” can hardly be considered an emerging market, an abundance of opportunity still remains for creative investment across the five boroughs: price per square foot has grown consistently over the past decade, and leasing activity has been steadily rising.
Anticipate continued strength in the multi-family sector, increasing commercial activity in the Bronx, and steady foreign investment.
In a sense, New York is almost a nation of its own, where instead of emerging markets, it instead has emerging neighborhoods.
It’s less about how one should invest, and more so about how they should be doing so—which presents all-the-more opportunity for savvy agents.
3. Denver, Colorado
Denver’s River North Arts District (RiNo) is home to several special tax districts and a thriving arts and culinary community helping to spark its revival.
Already home to a 25,000+ square foot specialty food market, the area has been looked at in recent years as one of the hottest neighborhoods to live, work, and play.
4. Jacksonville, Florida
Over the past few years, this mid-sized Floridian metropolis has been seeing some revitalization efforts for the first time since the 2008 recession, signaling a long overdue upward trend for the city.
Though no particular sector has been leading the pack, Jacksonville has been the site of significant retail investment, with the St. Johns Town Center shopping district spurring explosive growth throughout the region.
With population growth of 1.5%, employment up 3.6%, steadily increasing home values, and emerging cultural attractions, the Sunshine State’s “River City,” might just be on its way to prevalence.
5. San Jose, California
In 2017, Marcus and Millichap ranked San Jose as the number one office market in America, noting that the region’s vibrant, technology-driven business climate continues to drive office-space demand.
Recent news points to the fact that the market is still very strong.
San Jose mirrors many changes seen across the entire state of California, and with big players like Apple, Nvidia, and Google establishing themselves in the city, San Jose should continue to see vacancy rates below the national average and continued interest from highly educated millennials
6. Phoenix, Arizona
Arizona’s slow and steady, growth following the recession has continued through to the present, notably in Phoenix.
The stable climate in Phoenix has served as a nice foundation for commercial real estate investment in the city.
ADP, ZenReach, and Northern Trust have all announced high-profile developments in Greater Phoenix, which bodes well for commercial real estate brokers in the area.
7. Portland, Oregon
Portland’s original Meatpacking District recently transformed into a hotbed of creative activity with robust demand and exceptional rent growth.
Rich in history, the close-in Eastside has a solid inventory of multi-story industrial buildings perfect for startups, creative agencies, and tech companies.
While population and job growth have remained stagnant since 2017, the city is still seeing a solid rate of growth.
Portland’s well-educated workforce offers tech and professional service leaders a particularly attractive growth opportunity.
8. Austin, Texas
Austin’s burgeoning economy continues to expand, offering tech companies and residents a lower cost of doing business than cities like New York and San Francisco, as well as access to one of the most educated workforces in the nation.
Sometimes dubbed “Silicon Hills,” the city has thousands of workers from companies like Google, Facebook, Atlassian, and Oracle, with an incoming campus from Apple on its way (potentially adding another 15,000 employees).
9. Oakland, California
Sitting just outside the bustling city of San Francisco is Oakland, CA.
In 2015, one building—at 1955 Broadway—was purchased by the ride-share giant, Uber, who had plans to open a second headquarters at the location.
Then, while Uber ended up selling the property to CIM Group in 2017, the building has since been leased by Square, another tech company prime to turn some heads.
As vacancies continue to shrink, employment rates continue to grow, and some San Francisco could-be’s decide to go for the nearby, more affordable option, Oakland-based commercial real estate brokers only stand to profit as a result.
Property intelligence platforms like Reonomy offer investors, brokers, and appraisers real-time access to the insights needed to define neighborhoods, find buyers and sellers, get in touch with owners, and win more business.