Industrial employment growth emerged as a key driver of commercial real estate demand in select markets, according to National Association of REALTORS® newly released Q3 2026 Commercial Real Estate Demand Index. While industrial employment remained relatively flat nationally, stronger job growth in manufacturing, transportation and warehousing helped propel select markets higher in the rankings, notably San Antonio, Seattle and Nashville.
Of the 306 metropolitan areas tracked in the index, 143 scored above 100 in the third quarter, indicating stronger commercial real estate demand drivers relative to other markets. St. George, Utah, retained the top spot with a score of 132, followed by Huntsville, Alabama (125); Fayetteville-Springdale-Rogers, Arkansas (123); Sherman-Denison, Texas (123); and Ocala, Florida (121). Miami, New York, Los Angeles and San Francisco continued to score below average, though San Francisco improved approximately five points year-over-year.
“The story this quarter is where companies are hiring,” says Nadia Evangelou, principal economist and director of real estate research at NAR. “While industrial employment has been relatively flat nationally, some markets are adding jobs much faster than others. San Antonio is a good example,” she says, “moving from 76th to 9th in just one year—the largest increase among all markets. These differences in local employment growth are reshaping which markets show the strongest commercial real estate demand signals.”
Other notable ranking increases include Seattle, which rose from 146th to 44th, and Nashville, which advanced from 73rd to 20th. Austin entered the top 10 for the first time this year, marking its highest ranking since Q3 2023. As seen elsewhere, stronger industrial employment mostly drove the rebound.
In other sectors, leisure and hospitality employment increased in approximately two-thirds of metros, while retail trade employment lagged.
“Two markets can have similar vacancy rates and rent growth, but very different underlying demand,” Evangelou says. “Looking at where jobs are growing helps us understand where commercial real estate demand may be heading.”
