Despite the pandemic, the opportunities for investing in commercial real estate are abundant. The US continues to expand in global financial markets which makes it very attractive to international investors.
There’s so much potential in commercial real estate investments all across the country today but among all the cities and locations, seven cities stand out.
Whether it has to do with job opportunities, taxes, rental rates, or commercial architectural design, each city listed below brings something different to the table but also has a few common things with each other.
What is Commercial Real Estate?
Commercial real estate, or CRE, are properties that are exclusively used for business and profit. These properties are typically leased to tenants for income-generating activities such as office space, a small shop, or a big shopping center.
CRE is divided into these different categories:
- Retail Space
- Office Space
- Hotels & Resorts
- Strip Malls
- Health Care Facilities
Which Cities Are Tops When It Comes to CRE?
As far as commercial real estate is concerned, the following seven cities showed the most potential for investment and growth this year.
1. Atlanta, Georgia
ATL is here on this list for two main reasons.
First, CRE experts predict that its rent growth will grow even more in the next few years with numbers being projected at 4% growth between now and 2024.
Second, its hipsturbia trend makes it a hot and worthwhile market for investors to take part in. Hipsturbia refers to the increase in mixed-use developments in the suburbs, such as the ones in Alpharetta and Decatur.
2. Austin, Texas
Prior to the pandemic, experts and analysts predicted that Austin will be the nation’s leader in job growth for the year. And while the pandemic has put a hold on it, it still shows so much potential that makes it one of the top contenders in this category.
Austin had an economic boom that was fueled by low taxes, affordability, and a lot of tech jobs, with tech giant Apple setting its eyes on opening a $1 billion campus by 2022 with jobs for as many as 15,000 employees.
3. Boston, Massachusetts
Boston ranks sixth in the nation with its gross domestic product per capita rate and is the tenth most populous city in the country. These give it such an economic punch that investors would have to be blind to dismiss the numbers.
Since Boston’s technology and education attract investors from all over, there is not enough middle-density housing to accommodate everyone. CRE investors can take advantage of this lack and help meet the need.
4. Charlotte, North Carolina
If infrastructures are an indicator of growth, then Charlotte is indeed growing. The Charlotte Douglas International Airport expansion is underway and bus and light railway networks are also some of the city’s priority projects.
The business-friendly environment and low taxes are what make Charlotte very attractive to investors and are what push its development and growth. Investors from the real estate, tech, and manufacturing industries all agree that Charlotte is worth every penny they’re putting out.
5. Dallas-Fort Worth, Texas
Another city that’s upping its infrastructure spending is Dallas-Fort Worth. ; The city is funding the expansion of the Cotton Belt Regional Rail Corridor. The Silver Line is designed to connect neighboring counties to the DFW International Airport and is slated for a 2022 launch.
A few more noteworthy projects, such as Amazon Air’s regional hub and the new American Airlines terminal, are all indicators of DFW’s growth and potential.
6. Nashville, Tennessee
CBRE lists Nashville as fifth overall in the nation in rent growth within the next five years. This makes total sense because jobs keep coming to the city which makes it a sound commercial real estate investment market.
Two notable projects are bringing in at least 7,000 new jobs to the city. The first one is Amazon’s $230 billion Operations Center for Excellence which is opening 5,000 jobs. The other 2,000 jobs are courtesy of Smile Direct Club which plans to fill in all the slots between now and 2024.
7. San Jose, California
San Jose CA, just like Boston, is a densely populated area that is supported by education and technology. And similarly, it doesn’t have the capability to meet the demand for medium-density housing. This puts San Jose at a rent growth of 1.6% between now and 2021, according to CBRE experts.
Like ATL, the city features hipsturbia with its growing walkable mixed-use developments in its suburbs.
These are just some of the prime locations for commercial real estate this year. As the country is slowly recovering from the COVID-19 pandemic, expect that there is a lot more to be added to this list in the following year.