5 Fastest Growing CRE Markets (And Why You Should Care)

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Includes: IYR
by: The SeedFeed Team

CRE overall has made a steady recovery from the downturn, but there are naturally some markets that are outperforming the rest. SeedFeed shows those areas where technology and energy drive the economy are attracting well-paid workers and in turn more businesses to support and serve that population.

Some U.S. cities are showing rapid growth in their CRE market, generally in response to strong job growth. Other factors include business-friendly environments, and demographic factors, like the population's overall education level. While lists vary to some degree, most sources agree that these 5 cities are among the top CRE performers in the country.

Denver

With a comparatively low cost of doing business, Denver is an attractive choice for growing companies, particularly in the technology, aerospace, and telecommunications sectors. The city is currently ranked #1 in Forbe's list of Best Places for Business and Careers.

Atlanta

This southern capital and transportation hub added around 140,000 jobs in 2015, putting it at #2 in the nation for job growth. Construction is brisk, creating thousands of jobs in the city, and the city's major universities and the Centers for Disease Control support well-paid jobs in medicine and technology. The city has a broad-based economy and a low cost of doing business for a larger metro area.

Seattle

The factor driving Seattle's strong CRE market is simple: technology. The city's tech sector is creating jobs and drawing new companies into the market. Major employers here are Boeing (NYSE:BA) and Microsoft (NASDAQ:MSFT), and their presence attracts a constellation of related firms and services. Seattle is seeing increased activity from international investors as well, as fierce competition in the primary markets causes them to shift their focus to secondary cities.

Charlotte

This North Carolina city is one of the fastest growing in the U.S. The population is expected to increase by nearly 50% in the 20 years from 2010 to 2030. Job growth is strong, and primarily comes in the construction industry, up 6% last year. Retail and industrial properties are the sectors showing strongest performance in this market.

San Diego

Demand for commercial space in all sectors remains strong in San Diego, with decreased vacancy rates for all types of commercial property. These are expected to fall to 3.5% for the industrial sector by the end of 2016. Steady growth is forecast for employment, which is expected to grow 4.2% in construction, 4.1% in healthcare and 3.7% in the professional & business services sector.

Other U.S. cities that bear mentioning include Austin and Raleigh-Durham, both of which possess young, highly educated populations. Austin is home to the University of Texas and is a center of tech innovation, and Raleigh is a corner of North Carolina's Research Triangle, with its powerful combination of research and practice in the medical field. Although Austin's office sector shows signs of slowing, the outlook is good for both of these metro areas for 2016.

These fast-growing markets represent solid investment opportunities in CRE and a smart way to diversify.