Experts anticipate that the commercial real estate market will continue to be healthy going into 2018. As investors look to find the next property to add to their portfolio as the new year approaches, these are the five markets CRE investors should watch in 2018. From drastic headquarter moves to the increase in suburban office market interest, the time is now for investors to expand their portfolios.
Let’s take a closer look at the five CRE markets investors should watch in 2018.
Phoenix is seeing low vacancy rates coupled with healthy rent growth, making for an average annual NOI return in the low 5% range, according to NREI. The Urban Land Institute also gave Phoenix a 3.7 out of 5 on the investment score for multifamily. If you are an investor looking for the next multifamily property, Phoenix may be a good market to enter.
Austin, TX / San Antonio, TX
Austin has consistently been ranked as a top tech market. Austin has a diverse economy and a growing population base with an educated labor force. The hip and trendy atmosphere of the city also attracts millennial workers and investors to the area looking for the next property to add to their portfolio. San Antonio is also an emerging market with its affordability. The area is seeing an increase in the development of co-working spaces, urban residential, top-tier distribution facilities and historic redevelopments.
It’s no surprise that Dallas-Fort Worth is one of the five CRE markets investors should watch. From the various headquarter moves such as State Farm, Liberty Mutual and Toyota planting roots in the DFW Metroplex, there are also plenty of investment opportunities. Not only should investors keep an eye on Dallas, but they should also keep an eye on suburbs and areas like Fort Worth, since these markets are quickly gaining traction.
Denver saw $12.9 billion in investment sales in 2016 and is on track to surpass this in 2017, according to the Denver Business Journal. The multifamily, industrial and retail sectors are all continuing to surpass record highs. The city also saw $6 billion in apartment complex sales. Investors should certainly keep an eye on this market as they look for new industrial and multifamily properties to invest in.
According to NAI Global Research, over 13,000 new apartments were delivered in 2017, making the area a hotspot for investors looking to enter the multifamily market or to expand their portfolio. The Real Deal reported that Miami is the fifth most active city in the U.S. for multifamily construction and it has no plans to slow down anytime soon.
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