Economists' Outlook

Housing stats and analysis from NAR's research experts.

CRE Metro Market Reports: Florida is the Hottest Commercial Market

Florida is arguably the hottest commercial real estate market in 2021 Q4, boasting nine of the top 15 commercial real estate markets, according to NAR's recently released 2021 Q4 Commercial Real Estate Metro Market Reports.

To assess the area's overall conditions relative to national conditions, NAR created a Commercial Real Estate Market Conditions Index that captures market trends in the multifamily, office, industrial, retail, and hotel property markets in 390 metropolitan areas or portions of these areas. The index is based on the economic and demographic conditions of a metro area (GDP growth, employment, unemployment, wage growth, domestic migration, population growth) and commercial market indicators on net absorption, vacancy rates, rent, deliveries, ongoing construction, inventory, total sales volume, transaction price, and cap rates based on CoStar® market data. The index is calculated as the ratio of the number of variables where a metro area's condition is stronger compared to nationally to the total number of indicators used in calculating the index (25 if all are available). An index above 50 means market conditions are stronger than nationally, and an index below 50 means local market conditions are weaker than nationally.

Based on the index calculated for each metro area, Florida had nine of the top 15 metro areas among metro areas with a population of at least 250,000. Following Florida is the state of Washington with three metro areas in the hottest commercial markets list. North Carolina, South Carolina, and Tennessee are the other states with the strongest commercial markets.

On the whole, these top markets generally have strong job growth, are experiencing net domestic in-migration, have low vacancy rates and greater absorption of commercial property, and are experiencing strong rent growth compared to the nationally.

For example, the Miami-Miami Beach-Kendall metro area's office vacancy rate in 2021 Q4 was 10.5% compared to 12.2% nationally. It experienced a net absorption of office space in the past 12 months (643,000 sq. ft.) while nationally, the office market gave back 39 million square feet of office space. The asking rent for multifamily apartments is up 17.4% on a year-over-year basis, compared to 11.3% nationally. Regarding its industrial property market, industrial rents are up 15.3% year-over-year compared to 8% nationally. The vacancy rate in the brick-and-mortar retail stores is at a low 3.4% compared to 4.6% nationally. It is also experiencing job creation in the hotel/leisure industry at a faster pace than nationally.

Among metro areas with a population of at least 250,000, below are the metro areas with the strongest overall commercial real estate market conditions compared to nationally. Click on the metro area to download the report.

Hover over the map to view the Commercial Real Estate Index by metro area:

Download the metro area reports at the state level on NAR's Research Group webpage Commercial Real Estate Metro Market Reports.