National Association of Realtors releases index tracking 300+ markets. South Carolina shows highest demand potential. St. George, Utah and Raleigh lead individual markets.

South Carolina Leads New Commercial Real Estate Demand Index

The National Association of Realtors has introduced a new analytical tool designed to help investors identify emerging opportunities in the commercial real estate market. The index, which analyzes over 300 metropolitan markets across multiple property sectors, points to South Carolina as the state with the strongest future demand potential for commercial real estate investment.

The new index represents an effort to move beyond reactive market analysis toward predictive indicators of commercial real estate momentum. By examining specific economic indicators across different regions, the index aims to reveal where market conditions are building strength that could translate into sustained investment opportunities.

How the Index Measures Market Strength

The NAR index employs a multifaceted approach to evaluate markets, with tailored metrics for each commercial real estate sector. For office properties, the index tracks employment growth in professional and business services. Industrial markets are assessed through manufacturing, transportation, and warehousing employment trends. Retail demand is gauged using data on retail trade growth and leisure and hospitality employment. The multifamily sector analysis incorporates population growth patterns and net migration figures, including both domestic and international movement.

These various data points are drawn from government sources, including the Bureau of Labor Statistics and Census Bureau, providing an objective foundation for the rankings. When combined, they create a comprehensive picture of each region's economic momentum and potential for commercial real estate demand.

According to Nadia Evangelou, principal economist and director of real estate research at NAR, the index demonstrates where economic conditions are favorable for property investment. The analysis shows where economic momentum is building and demand is growing, though the index serves as an indicator rather than a definitive investment recommendation.

Markets That Have Shifted Since 2022

A striking finding from the analysis is how dramatically the commercial real estate landscape has changed since 2022, the peak of pandemic-era migration patterns. Raleigh, North Carolina, stands alone as the only major metropolitan market in the nation that shows stronger indicators today than during that period.

By contrast, several markets that experienced explosive growth in 2022 have seen significant declines. Austin, Texas; Miami, Florida; and Naples, Florida, have all registered notable drops in their index rankings compared to their 2022 performance. This represents a substantial shift from the pandemic era when these Sunbelt destinations were magnets for both capital and people.

Emerging Opportunities Beyond Major Markets

The index reveals that St. George, Utah, currently leads all metropolitan markets in the overall ranking. The market benefits from particularly strong office sector employment growth alongside robust population increases and above-average industrial demand. This combination of strength across multiple sectors distinguishes it as a market experiencing broad-based economic momentum.

Analysts highlighted potential in smaller and mid-sized metropolitan areas that may offer overlooked investment opportunities. Fayetteville, Arkansas; Huntsville, Alabama; and Spartanburg, South Carolina, were cited as examples of markets demonstrating solid commercial real estate prospects. Huntsville, in particular, stands out for registering some of the nation's strongest multifamily sector performance, while Fayetteville shows consistent growth across multiple sectors.

For specific sector opportunities, Salem, Oregon, and Fairbanks, Alaska, rank highest among markets for industrial real estate demand. These geographic clusters can help investors identify regions aligned with particular property types or strategies.

The Coastal Markets Challenge

A broader pattern emerges from the index analysis: large metropolitan areas along the coasts, traditionally the bellwethers of commercial real estate trends, are generally showing weaker momentum compared to mid-sized Sunbelt markets and smaller growing regions. Major markets like New York and San Francisco are registering lower index scores than smaller, faster-growing metropolitan areas in the southern and interior regions of the country.

This shift reflects deeper changes in employment patterns, population migration, and business location decisions that have reshaped commercial real estate dynamics. The index suggests these changes are not temporary fluctuations but indicators of sustained economic momentum in particular regions.

Small and mid-sized metropolitan markets may offer the most attractive opportunities for commercial real estate investors looking to capitalize on emerging demand. Unlike analyses focused exclusively on the largest markets, this index provides data-driven insights into where fundamental economic conditions are building competitive advantages for property investment.