Florida boasts five of the top 10 markets with the strongest commercial markets, including in the apartment, office, industrial, retail, and hotel sectors, according to the National Association of REALTORS®’ Commercial Market Conditions Index rankings. NAR’s index measures a metro area’s economic and demographic conditions (e.g., employment, wage growth, population growth, etc.) as well as several commercial market indicators (e.g., vacancy rates, rents, leasing, inventory, sales volume, etc.).
NAR’s index shows the following top 10 metros had the strongest commercial markets in the second quarter:
- Las Vegas
- Cape Coral Fort-Myers, Fla.
- Port St. Lucie, Fla.
- Raleigh, N.C.
- North Point-Sarasota-Bradenton, Fla.
- West Palm Beach-Boca Raton-Delray Beach, Fla.
- Punta Gorda, Fla.
- Spokane-Spokane Valley, Wash.
- Olympia-Tumwater, Wash.
In 2020, Cape Coral, Fla., added 18,500 people who moved to its metro area, prompting higher demand for apartments. The area also has seen demand for office and industrial spaces increase over the past year. Cape Coral has absorbed 966,000 square feet of retail space—“which speaks to the robust demand for retail brick-and-mortar real estate,” Gay Cororaton, a research economist for NAR, writes for the association’s Economists’ Outlook blog.
Affordable home prices and job growth are driving migration to Florida and helping to lift its commercial markets. Over the past year, it’s had one of the highest domestic net migrations in the nation. Also, Florida offers tax credits that have been drawing new businesses to the area, such as through its Qualified Target Industry Tax Refund Program.
“Florida’s commercial outlook is bright because of the strong migration into the area, which is driving the demand for multifamily properties, office space, and retail,” Cororaton writes. “The sustained growth in e-commerce will continue to also fuel the demand for industrial space in Florida’s coastal metro markets, both in the East and West coastlines.” However, Cororaton notes that Florida is competing with other southern states in attracting jobs and new residents, especially from North Carolina, Georgia, Tennessee, Texas, Arizona, and New Mexico as well as affordable Midwest states like Kansas and Indianapolis.