According to new research from the National Association of Realtors® (NAR), Florida has five of the hottest commercial real estate metro markets in the first quarter of 2022 – the metro areas of Orlando, Miami, Palm Beach, Fort Lauderdale, and Fort Myers.
The NAR Commercial Real Estate Market Conditions Index takes into account 25 variables. It compiles data on a metro area’s economic conditions, demographics, and employment, including job growth, wage increases, and population growth, as well as market conditions such as vacancy rates, absorption, rent growth, cap rates, and more.
Overall, the South has the most thriving commercial markets, accounting for 11 of the top 16 markets.
The economic and commercial market conditions in Orlando are all better than the national average, with an index of 84. (meaning Orlando is outpacing the U.S. on 21 out of 25 indicators). Wages are increasing by 9% in Orlando, compared to 4% nationally. In the year 2020, 10,000 people are expected to relocate to Orlando from other states. Multifamily asking rentals have increased by 26%, compared to a nationwide increase of 11.4 percent. The vacancy rate in offices is only 8%, compared to 12.2% overall. The vacancy rate in the industrial sector is 3.6 percent, compared to 4.1 percent overall. The vacancy rate in the retail sector is 3.8 percent, compared to 4.5 percent overall. Orlando is a vacation hotspot, with 19% of the workforce employed in the hotel/lodging industry, compared to 10% nationally.
The main risk area in Orlando’s commercial market is the hotel/lodging sector, as rising airfare and gasoline prices make travel costlier.
According to NAR’s index, the following 16 markets are the hottest in commercial real estate.
West Palm Beach-Boca Raton-Delray Beach
Fort Lauderdale-Pompano Beach-Deerfield Beach
Riverside-San Bernardino-Ontario (Inland Empire), Calif.
Atlanta-Sandy Springs-Roswell, Ga.
Las Vegas-Henderson-Paradise, Nev.
Charleston-North Charleston, S.C.
“Nar: Fla.. Home to the Top 5 Commercial Markets.” Florida Realtors, 18 May 2022, https://www.floridarealtors.org/news-media/news-articles/2022/05/nar-fla-home-top-5-commercial-markets.