St. George is a city and the county seat of Washington County, Utah, United States. Located in southwestern Utah, on the border with Arizona, Denistangneyjr | Stock | Getty Images A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future issues directly to your inbox. South Carolina ranks first among all U.S. states in potential future demand for commercial real estate. That’s the conclusion of a new index from the National Association of Realtors, which is intended to be a crystal ball for commercial real estate investors. Uses factors from local economies to indicate future demand. The index analyzes more than 300 metropolitan markets, with separate measures for the office, industrial, retail and multifamily sectors, and measures the economic conditions of each region. Realtors use government data from the Bureau of Labor Statistics and the Census Bureau for population and migration, which they say informs the rankings. For the office sector, specifically, the index analyzes employment growth in professional and business services. In the case of the industrial sector, this is job growth in manufacturing, transportation and storage. For retail, the NAR measures growth in retail trade, as well as employment in leisure and hospitality. In the multifamily sector, it incorporates population growth and net migration, both domestic and international. All of that is combined into a single index. “It doesn’t say, ‘Okay, go and just buy a property,’ but it says… when the data shows that momentum is increasing, demand is increasing,” said Nadia Evangelou, chief economist and director of real estate research at NAR. It also compares these markets to 2022, the peak of the pandemic migration boom. Raleigh, North Carolina, is the only major U.S. market that is stronger today than it was then, according to the index. Previously very popular markets such as Austin, Miami and Naples, Florida, have declined noticeably since 2022. The strongest metro market in the index is St. George, Utah, with the highest office job growth in the country. Get Property Play delivered straight to your inbox CNBC’s Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox. Subscribe here to get access today. “It also has very strong population growth and immigration, and its industrial demand is above average,” Evangelou said. “So St. George, for example, is number one, because one industry had a good year, so there’s broader momentum there.” While other indices focus on larger metropolitan markets, Evangelou said small and medium-sized markets could offer some of the best opportunities for investors. Cited Fayetteville, Arkansas; Huntsville, Alabama; and Spartanburg, South Carolina. Fayetteville is experiencing broad growth, while Huntsville has one of the strongest multifamily scores in the country, he said. The index also breaks down where each of the four sectors is experiencing the greatest demand. For example, Salem, Oregon, and Fairbanks, Alaska, rank highest in the industrial sector. “When we look at New York, San Francisco and the large coastal markets, we see that the large markets are still generally weaker than the fast-growing Sunbelt and the smaller markets in this index,” Evangelou said. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.
