Today we’re taking a look at some of the top performing CRE markets across the country, based on input from the Fundrise underwriting team and investments committee, along with a recent report from Coldwell Banker Commercial on the Top CRE Markets of 2014.
Here are the top 10 as assessed by CBC and our team:
1. Denver: Industry observers have been hot on this market for a while now, largely due to the rapid growth of Denver’s job market. Many neighborhoods are seeing heightened activity, but two of the most talked about are the Union Station area and River North (RiNo) where Fundrise recently funded a mixed-use development with Littleton Capital Partners.
2. Atlanta: This MSA ranks third in metro communities with the most Fortune 500 companies. Several major corporations are headquartered in Atlanta, which drives real estate growth across asset classes.
3. Seattle: Seattle falls under the radar of most institutional real estate capital, but active investors know that the city has amazing job growth which supports the multifamily and retail sectors. A handful of major transactions have taken place in the last few months, including the $270M purchase of Seattle’s Pacific Place Mall.
4. Charlotte: In addition to being the banking capital of the South, Charlotte has a tremendously strong retail sector with more than 1.1M square feet of absorbed in 2014 alone. Vacancy rates are down, construction is up, and rental rates are rising.
5. San Diego: San Diego commercial real estate is a hot commodity right now. Retail rents are rising, and the retail real estate construction pipeline is at 3.5 million square feet, according to CBRE. Fundrise recently opened an office in San Diego to source investments in the growing markets.
6. Phoenix: The poster child of overbuilding that suffered greatly during the recession is bouncing back. Phoenix ranks fifth on CBC’s list for retail as demand begins to return.
7. San Antonio: San Antonio is often overshadowed by other cities in Texas, but its commercial real estate market is rapidly growing. The area is the number one tourist destination in the state, and has had a steady stream of new residents moving to the area since the recession.
8. Las Vegas: Another hard-hit recession city is turning things around. Both unemployment, population growth, and loan delinquencies are moving in the right direction for Vegas.
9. Austin: Austin ranked first on the CBC report for population growth, with thousands of millennials attracted to the city’s growing tech market. A landmark $400M mixed-use project is underway as Austin’s retail market heats up.
10. Orange County: Rent growth and acquisitions are both picking up in Southern California. Orange County’s retail centers are seeing increasing growth, as well.