2022 witnessed a steep drop in active commercial leases. As a result, businesses have to be smarter than ever about where they do plant their physical offices. Maximizing CRE exists at a cornerstone of balancing talent, price, features, and longevity so as we enter 2023, there are five key cities that are on the rise for commercial real estate. The Urban Land Institute has released a study that declares these locations as top spots for businesses to lease and invest in. What makes these areas so attractive? They offer great opportunities for affordable leasing and an abundance of top talent. If you're looking to relocate your business in the near future, consider one of these five cities:
1. Nashville
Nashville is now the first metropolitan area since San Francisco in 2014 to repeat the top ranking in the annual “Emerging Trends in Real Estate." The report cited Nashville’s strong residential real estate market and plans for more community building, with 2 billion dollars from the private sector expected to flow into the market over the next five years. This growth is due, in part, to businesses fleeing high-cost coastal markets like New York and Los Angeles.
The city that earned acclaim through its connection to music offers a robust economic climate. Nashville has witnessed incredible expansion in the last few years. It was also noted as the city with the most financial growth out of the country's largest metro areas in 2021.
A robust tourism industry also backs Nashville. Talk to your family and friends; chances are someone recently went to or is going to Nashville. Since it is such a popular tourist destination, it has steadily lured in new businesses and investors interested that, in turn, feed the job growth rate and property appreciation. In addition, Nashville is home to numerous thriving industries, including education, trade, professional services, and hospitality.
All said and done, Nashville offers a strong commercial real estate market driven by a unique culture and low-restriction market that encourages corporate success. If you're looking for a great city for your CRE, Nashville should be at the top of your list! Learn more about The Pros and Cons of Locating Your Business in Tennessee.
2. Dallas-Fort Worth
Dallas is one of the strongest commercial real estate markets in the country. The city is known popularly as the “financial hub of Texas,” with its tax-friendly regulations and central location for major international and national trade. It also offers multiple incentives and programs to stimulate its local economy, including job training, tax exceptions, and renewable energy incentives.
Dallas- Fort Worth has witnessed booming success in the past few years. It was just announced that the city jumped five spots from 2021 and is now the second-best city in terms of the commercial real estate market. This is in part due to the number of office-using jobs increasing to pre-pandemic levels. Dallas has also been noted for growing in terms of biotech innovation centers.
Dallas supports its businesses. Home to over two dozen Fortune 500 companies, the city also accounts for one-third of Texas’s $1.8 trillion economy. Across the board, Dallas is a wise choice for a commercial real estate investment, whether you’re laying down roots or relocating. Overall though Texas is a wise move for businesses, learn more about The Pros and Cons of Relocating your Business in Texas.
3. Atlanta
Atlanta is the third top city for business real estate. Atlanta has been growing in recent years, with the only other city experiencing the number of office-using jobs rise to pre-pandemic levels. This classification sticks out, to be rewarded with a title five points higher than the previous year.
The Georgian city is a top location for businesses, having lured in 29 of America’s largest Fortune 500 corporations and 203 of the nation’s fastest-growing private companies. But it’s not just businesses taking advantage of the local economy. Atlanta saw 14% population growth in the past decade, making it one of the nation’s primary markets to pay attention to.
Atlanta is a hotbed commercial real market for multiple regions. From its abundance of top talent and affordability to its status in the country’s top 10 GDPs- the Georgian city is highly strategic for long-term growth. Yet, the property value of commercial spaces in Atlanta is still a fraction of what you would pay in other cities like San Francisco. To learn more about the pros and cons of locating your commercial property in the high tech hub of the greater Silicon Valley, read "Should You Locate Your Business in San Francisco?"
All said and done, Atlanta is one of the top emerging real estate markets and should be recognized for its opportunities.
4. Austin
Keep Austin wealthy. The city has been growing "weird"-ly fast. According to the Pwc, it belongs to an elite "supernova" classification of cities. Supernovas like Austin are characterized by stable yet explosive job and population growth throughout the past decade.
It's also economically diverse, with young professionals galore and substantial white-collar employment, making it an appealing destination for real estate investment. The Lone Star state has multiple major cities characterized by economic growth (and growth in real estate markets across the board). It's not just commercial properties benefiting; real estate growth is present in residential properties, multifamily properties, etc, further strengthening the local economy. Austin also bolsters its tech industry, investing 1.9 billion in tech companies and startups in 2019 alone.
Commercial real estate investors are foaming at the mouth to get a piece of Austin land, and it's easy to see why. With so many businesses and major companies looking for office space, this represents a powerful opportunity... Rental properties are valued at a premium here, but still, even rent growth leaves tenants with rates under what they would be paying in traditional hubs like NYC.
With all that going for it, it's no wonder Austin is one of the top cities to keep an eye on for your commercial real estate in 2022.
5. Tampa / St. Petersburg
If there's anything that's consistent among 2022 CRE trends, it's that the sunbelt is a powerhouse of business-friendly opportunities. But, certain all-stars shine a little brighter, the "Super Sun Belt Cities." Tampa is one of them. They point to the areas of incredible, sustained growth despite the volatile national economic conditions at play.
Tampa has circumvented recovery and is prospering as one of the fastest-growing markets in the country.
The only Florida city on the Top 5 list is one of the most impressive CRE markets in the nation. The sunny, warm weather and lack of income tax have caused professionals from all over the country to rush to Tampa’s Gulf Coast.
What else is driving this population growth? The city has a highly diversified economy, with a solid mix of expanding industries. Businesses are also attracted to the area for its affordable operating costs and quality of life.
The commercial property market is exploding because, from a CRE perspective, there's a lot to like about Tampa. Despite its allure, the cost of living remains extremely reasonable, at 94.6, under the national average of 100. It also performs exceedingly well in terms of critical business factors. Labor costs, office space availability, rent prices, and corporate taxes contribute to Tampa’s striking business-friendly reputation. To learn about other top Floridian cities, check out The Top 4 Business-Friendly Cities in Florida.
The Top Cities for CRE
These are the five top cities for business real estate in 2022. All of these cities have experienced economic growth in recent years, making them desirable locations for businesses. These emerging markets also have a variety of amenities that make them attractive to businesses, such as job growth, population growth, low rent prices for office spaces, transportation options, etc. As a result, they are proven fortune builders for large-scale organizations.
If you're looking to make a commercial real estate investment, whether, in a new lease or relocation, decisions with regarding your commercial space should never be taken lightly. To ensure that your CRE is in your best interests, you should be working with a true Tenant Rep. Tenant Reps at iOptimize Realty® constantly studying commercial real estate trends so you don’t have to. We can help direct you to the office market that will best support your team and organization.
Learn more about what you should be considering if you’re searching for office buildings: 7 Steps to Find Your Perfect Office Space.
If you’re ready to talk to a Tenant Rep now, schedule a free, no obligation meeting today.
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