The real estate market has changed wildly over the last two years. During the pandemic, many businesses didn’t have the funds to invest in commercial buildings. As restrictions lifted, people started moving to new locations, stimulating markets that hadn’t previously been centres for real estate growth.
Two years after pandemic-inspired lockdowns, commercial real estate is well on its way to recovery. Businesspeople in e-commerce, hotel owners, and companies changing their supply chains will all need new commercial buildings. Here are five of the fastest-growing U.S. cities for commercial real estate.
Nashville was becoming a real estate hotspot even before the pandemic. It’s continued to do well over the last few years because it’s a friendly location for both homeowners and businesses. Taxes are relatively low and so is the cost of living – or at least it was before building demand started to outpace supply.
Housing and rent costs have risen as more and more people move to this desirable area. The increasing population means businesses can afford to invest in new commercial buildings because they have plenty of patrons and workers. In addition, large companies like Amazon and Oracle are helping to fuel Nashville’s growth.
Because of the large population and increase in business, Nashville is an excellent place for investing in commercial real estate in 2022. Out of all the cities in the U.S., Nashville made the top 20 on Crowdstreet’s official analysis. Continued growth is projected for the area.
Charlotte has also been growing rapidly. In 2021, the city garnered $3.2 billion in business investments. In just the last three years, four Fortune 500 companies have moved their headquarters to this location. Rent prices are increasing as young professionals and families flock to the area.
This city is experiencing a positive feedback loop that’s perfectly suited for the expansion of commercial real estate. As businesses grow and prosper, new people continue moving to the area. These people fuel economic growth even more, encouraging additional companies to invest in the area.
If trends continue, Charlotte will need new warehouses, office buildings, and apartment complexes for many years to come. Because of its economic growth, Charlotte also makes Crowdstreet’s top 20 best cities to invest in commercial real estate in 2022.
Like many other major cities, Boston was hit hard by COVID-19-related legislation that required many commercial real estate owners to close down their premises for months. Thankfully, those days are in the past and commercial real estate is growing again in Boston.
According to Crowdstreet, the Boston-Cambridge area has one of the best markets for life sciences spaces in the U.S. Demand for laboratory and therapy space development has grown so much that it’s outpaced new office spaces in this area.
Because many companies are interested and open space is limited, the competition for commercial buildings in Boston is high. Local economic growth has also affected rent prices – apartment costs are 20% higher than last year and rising.
Austin topped our list of top commercial real estate markets in 2021, and it’s still going strong as a great place to invest. Several large companies, including Google, Oracle, and Tesla, have recently relocated or expanded their commercial properties in this area.
Low taxes and a growing population are also contributing to economic growth in Austin. Over the last year, the population in Austin increased by 2.3% – putting it in the fourth-highest place for numeric growth in U.S. cities. In addition to a growing economy, Austin is also a fun place to live.
This city ranks highly as a market for residential properties, office buildings, and retail. As the population continues to grow and the pandemic becomes history, companies will need more brick-and-mortar locations to meet Austin’s residential and economic needs.
According to Fortune Builders, Phoenix is one of the top 10 markets for commercial real estate in 2022. In the western part of the U.S., many people are relocating to Phoenix. In fact, it’s ranked second in the nation for net migration. As the influx continues, rent prices are expected to rise.
Commercial real estate sales in this city are hitting all-time highs in 2022. Just in the month of April, real estate investment sales for industrial and office properties in Phoenix reached $2.4 billion. This area continues to attract new people, creating amazing opportunities for commercial real estate investors.
The top industries in the area include tourism, technology, financial services, and health care. Phoenix’s job market is one of the best in the nation, with the state projected to add more than 700,000 jobs by 2030 in part due to its appeal to tech and manufacturing firms.
Commercial Real Estate Booms in 2022
Although the real estate market suffered during the pandemic, many businesses have recovered and are expanding their commercial properties in 2022. Locations and specific needs have changed, but the outlook for commercial real estate this year is good.
Investors should consider these five cities as some of the best options for commercial real estate. Nashville, Charlotte, Boston, Austin, and Phoenix are all growing economically and attracting a large workforce. These cities are ripe for continued expansion in commercial real estate in 2022.
Evelyn Long is the editor-in-chief of Renovated. Her real estate work has been published by the National Association of REALTORS®, Rental Housing Journal, and other online publications.