Top 10 Emerging Commercial Real Estate Markets to Invest In

Finding emerging markets in Commercial Real Estate (CRE) is a great way for investors looking to grow and maximize returns. These unique markets offer higher ROI, portfolio diversification, and long term stability by tapping into areas of population growth, economic growth or infrastructure development. 

The commercial real estate experts at Oxford Companies in Ann Arbor have put together their top recommendations of emerging commercial real estate markets, as well as the key factors that make some markets more attractive for CRE investment. Whether you’re a seasoned investor or new to the game, let Oxford guide you to commercial real estate success!

What is an Emerging CRE Market?

First, let’s define what we qualify as an emerging commercial real estate market. These markets generally have:

• Population growth: Areas with an influx of people means more housing and commercial space demand.
• Economic development: Thriving industries and new businesses, often in the tech space.
• Infrastructure projects: Improved accessibility and transportation is a large draw for workers and businesses.
• Job market growth: A growing job market means economic activity and opportunities.
• Affordable property with upside: Lower property prices means entry points for long term value.

By following these factors you can find great markets that are primed for commercial real estate growth.

Our Top 10 CRE Markets

These are our picks for top emerging commercial real estate markets based on the factors listed above.

1. Ann Arbor, Michigan

   Ann Arbor, Michigan has become an emerging CRE market fast mostly due to its dynamic and diverse economy. The city’s real estate is driven by tech startups and the University of Michigan, which is a catalyst for innovation and a key driver of the local economy. The growing healthcare and research industries add to this growth and demand for commercial space for these sectors. This diversity of economy means a stable base for CRE growth, making Ann Arbor a competitive and attractive market for investors.

   Ann Arbor’s growing population also means demand for mixed use developments that combine residential, retail and office space. The city’s focus on sustainability and community orientated initiatives has made it a forward thinking market that appeals to all types of businesses and residents. 

   Local professionals have cited Ann Arbor’s approach to urban planning as a key to long term growth. Specifically, multi-family housing and apartments have seen significant growth in the Ann Arbor area.

   The University of Michigan (UM) and Eastern Michigan University (EMU) create consistent, inelastic demand for rental housing, with 79% of UM students and 80% of EMU students living off-campus.

   • Over 100,000 individuals are connected to these universities as students, professors, or staff, underpinning the local economy and rental market.
   • Renters make up 60% of households in the University of Michigan Submarket and 45% in the Ypsilanti Submarket.
   • Net absorption rental absorption is well above historical averages, driven by strong demand.
   • Ann Arbor’s average market rent is the highest among Michigan cities compared to (Grand Rapids, Detroit, Lansing).

2. Raleigh-Durham, North Carolina

   Raleigh-Durham has become a top CRE market fast due to its growth and affordability. Anchored by the world renowned Research Triangle Park, the region is seeing significant growth in the tech sector, attracting innovation driven companies and highly skilled professionals. 

   The life sciences and engineering industries are also thriving and add to the diversity of the economy, meaning sustained demand for commercial real estate. Compared to other tech heavy cities, Raleigh-Durham has a more affordable housing market, which is attracting a growing workforce and supporting population growth. All of this makes Raleigh-Durham a highly attractive and sustainable market for CRE investment.

3. Nashville, Tennessee

   Nashville is becoming an emerging commercial real estate market thanks to its entertainment and hospitality industries. The city’s cultural appeal is attracting tourists and businesses, driving up demand for retail, office and multifamily space. 

   Corporate relocations and expansions are also driving population growth, and increasing demand for residential and commercial property. With a growing local economy and job market, Nashville is a market to invest in for long term CRE growth.

4. Austin, Texas

   Austin, Texas is showing great growth in part due to its appeal to younger demographics. 

   • We’re seeing massive population growth and appeal to millennials and Gen Z professionals.
   • This is resulting in high demand for flexible office spaces post-pandemic.
   • The city’s booming technology and innovation sectors have significantly expanded the local job market, attracting top talent nationwide.

5. Boise, Idaho

   Boise, Idaho is becoming a market to watch in commercial real estate due to a combination of economic and demographic trends. A steady flow of new residents driven by migration is growing the population and creating demand for housing, office and retail space.

   Boise is affordable compared to traditional real estate markets and is an attractive option for businesses and individuals looking for cost effective solutions without sacrificing quality of life. E-commerce is also driving demand for industrial real estate in the region as Boise is a strategic location for warehouses, distribution centers and logistics. All of this makes Boise a great market to invest in for long term growth.

6. Phoenix, Arizona

   Phoenix, Arizona is becoming a major player in commercial real estate due to a combination of factors that make it attractive to investors and businesses. Industrial real estate demand is growing rapidly driven by its location as a logistics hub and the growth of e-commerce. 

   Phoenix has a thriving tech industry that is attracting innovative companies and a strong foundation for economic growth. Commercial properties are also affordable and competitive to other major markets. Large infrastructure investments particularly in advanced transportation systems have made Phoenix a city ready for long term growth and development and is becoming a key node in the national CRE landscape.

7. Denver, Colorado

   Denver’s population growth and economic growth is creating demand for housing, retail and mixed use developments.

   Denver’s focus on green and sustainable development matches the broader market trend of sustainable real estate, and is attracting environmentally focused investors and businesses. This green outlook makes Denver a great market to invest in for long term CRE growth for developers looking for vibrant and forward thinking communities.

8. Salt Lake City, Utah

   There are a multitude of reasons why Salt Lake City is becoming a market to watch:

   • Tech Ecosystem: The city is filled with emerging startups, particularly in the tech sector creating jobs and economic growth.
   • Affordable Entry Point: Compared to other major markets in the region, property prices are still affordable, making this a great opportunity for new developments and investments. 
   • Increasing Capital: Venture capital in the area is growing –  and that’s fueling entrepreneurship.
   • Sustainability and Livability: Known for its high quality of life and location Salt Lake City is attracting businesses and individuals looking for a balanced and sustainable community for long term growth.

9. Tampa, Florida

   Tampa, Florida’s mix of economic and lifestyle factors make it an interesting emerging CRE market to watch:

   • Tourism and Hospitality: As a destination for both domestic and international tourists, Tampa’s tourism industry is driving demand for hotels, restaurants and retail space.
   • Startup and Remote Work: Its business friendly environment and appeal to professionals looking for flexibility makes Tampa a natural hub for startups and remote workers.
   • Suburban Population Growth: Suburban development is growing – and that’s creating opportunities for residential, mixed use and commercial properties to serve the growing population.
   • Quality of Life: With its warm climate, cultural diversity and affordability compared to other major markets, Tampa is still attracting businesses and individuals looking for long term investment.Charlotte, North Carolina 

10. Charlotte, North Carolina 

    Finally, Charlotte, North Carolina is becoming a top CRE market in the Southeast. As a major banking and financial center, the city is attracting businesses and professionals, as well as driving demand for office space and retail leases.

    Infrastructure development and affordable housing makes Charlotte a great long term economic growth market. Add to that the city’s steady population growth, and you have a great opportunity for mixed use developments and new investments.

Why Invest in Emerging Markets Now?

Investing in emerging markets means you can get ahead of the curve on the evolving economic trends and demographic shifts that are shaping commercial real estate:

• Post pandemic workforce dynamics: More focus on remote work means growth opportunities in smaller cities.
• Migration to smaller or mid sized cities: Demand for housing, services and infrastructure in these areas is growing.
• Market resilience during economic shifts: Emerging markets have shown they can adapt and thrive in uncertain times.
• First mover advantage: Investing early means stronger ROI and long term stability.

How to Evaluate and Invest in an Emerging CRE Market

Research and Partnerships Matter

When evaluating and investing in an emerging CRE, market research and partnerships are key. Start by looking at local demographics and economic growth trends to find areas of opportunity. Then, assess the market sustainability by looking at long term development plans and make sure they align with the economic projections.

Work with local experts

To get deeper insights and make informed decisions partnering with local experts or experienced property managers can be very valuable. Local teams, like Oxford Companies in Ann Arbor, offer great insights to the markets, allowing for swift movements and great returns. By combining these approaches, investors can position themselves for success in growing markets.

Why Diverse Markets Like Ann Arbor Should be on Your List

Ann Arbor is a vibrant and dynamic market, full of cultural richness, world class education and economic growth. Its unique combination of attributes makes it a great market for commercial real estate investments that prioritize sustainability and long term community impact. 

Oxford Companies is committed to growing in diverse markets like Ann Arbor by supporting projects that align with community values and forward thinking goals. Investors should look into the many CRE opportunities or talk to our experts to get customized guidance to help you achieve your investment goals.

Top Emerging Real Estate Markets – Final Thoughts

To make informed and successful decisions in today’s market, you need to stay ahead of the CRE trends. At Oxford Companies, we know how to adapt to the changing industry landscape while continuing to support growth in emerging markets. 

Your interest and investment in these opportunities will help create vibrant communities and strong marketplaces. Look into the many opportunities available, and get in touch with us or visit our website for more information and customized guidance.