The commercial real estate market is on the rise in the US. Some states are already known to be good markets for commercial real estate investments, but investors are exploring others for the same purpose.
And you should not be surprised if you see the markets flooded with newcomers quickly.
So raid these cheapest markets and invest early to reap higher benefits. Consider the effective rates of property tax, income growth, and population growth while considering the states for the investment of commercial real estate.
Also, consider the ease in availing the commercial real estate loans in these states before targeting them for the investment.
States that attract commercial real estate investors
Few states in the US attract commercial real estate investors the most for being the states with cheaper facilities and lower effective property tax rates.
However, these states also reflect good growth in income and job opportunities. Exploring and investing in these states can increase investors’ bank balances and provide them with a good portfolio. The financial support in terms of commercial real estate loans also encourages the efforts.
Colorado
Colorado has come up as one of the most profitable states when the commercial real estate is considered. A little research of the State will convince you of it being a good place for the commercial real estate investment.
Look out for the Commercial Real Estate Loans, Denver as well while you carry out your research. The state is strong in the business fundamentals for the real estate. The population growth is a good 8 percent in a 5 year period.
The median income growth rate is 18 percent reflecting the capacity of the people to go for better housing and better living. Besides, the high appreciation rates here also make it one of the most attractive places in the country.
Commercial real estate loans Denver could be availed to leverage upon while investing in the state.
Texas
The Lone Star State, Texas, provides new commercial real estate investors with immense opportunities to try their luck. The financial support provided through commercial real estate loans in Houston gives the investors confidence to build up their portfolios in the state.
While commercial real estate in Dallas scores the highest in rankings in being the most sought-after place not only in the state but in the entire country, Austin ranks next in the state. One may consider a commercial real estate loan, Texas for investing in the state as well.
Texas attracts investors as it is the state with the second-highest population growth rate and the tenth-highest job growth rate in the country. No doubt, this makes it the target of many newcomers in the commercial real estate business.
However, it is advisable to check out the papers qualifying one for a commercial real estate loan in Houston or even Texas before one leaps to invest in the state.
Nevada
The silver state, Nevada is considered a safe play by both the experts in the field of commercial real estate and the new-comers.
The appreciation of properties at an extremely fast rate makes the state so much sought for. Property appreciation is the fastest in the state.
Complementing the rate in property appreciation is the rate of job growth in the state. A high rate of 16% property appreciation over a five year period and the population growth rate of 8 % for the same period are the key factors that induce the investors to include properties in Nevada in their investment portfolio.
Utah
The beehive state has strong real estate market fundamentals, which attracts real estate professionals and new investors.
The exceptional rates of job growth and population growth along with the strong fundamentals allow the selling of homes in the state in less than a month.
Healthy economic activities in the state make it a destination for the investors interested in the residential and the commercial real estate investment. Investment anywhere in the state is profitable; still, Logan is considered the best place for investments.
Idaho
Idaho is known as the gem state. A state with a robust housing market, it attracts the investors as the selling of the houses takes just a month here.
Low effective property tax rate, strong population growth rate, income growth rate, job growth rate, low labor cost and a very high appreciation rate together make the state a profitable destination to the long-term investors of a commercial real estate.
Boise, Idaho, is the most sought-after market for commercial real estate investment. Commercial real estate loans help investors overcome any financial deficiencies.
Florida
Seen as the holiday destination by many, the state has boomed in the real estate market.
The population growth rate of 8 percent for a five year period and the income growth rate of 11 percent for the same period are not the only factors to be considered while selecting the state for commercial real estate investment, there are more to it.
The extremely low labor costs and the availability of the infrastructure and construction materials at low rates make the state one of the cheapest for investment in a commercial real estate.
Miami, Tampa, and Orlando are the most preferred places for investment in a commercial real estate. Investors here have experienced high returns in a short span of time.
While Miami promises a high return of 18.6 percent to the commercial real estate investors, Tampa and Orlando are also not far behind with the average returns of 15 -16 percent.
Washington
An evergreen state is a marketplace with strong trading and business fundamentals. The good job growth rate complemented the excellent rate of appreciation of the homes and other real estate structures give good opportunities to the investors.
Moreover, the availability of commercial real estate loans in Seattle also encourages investors to sell their real estate business ideas.
Though the effective property tax rate is on the higher side when compared to many other states, Washington still is one of the most preferred yet cheap places for the investors.
The population growth rate of 7 percent and median income growth rate of 15 percent over the last five years have been the positive segments that investors look for while investing, in addition to the financing facilities of commercial real estate loans in Seattle.
Tennessee
Tennessee can be considered for investment by new investors in the field. The strong market fundamentals in the state make the real estate dealings quite frequent.
On an average, a real estate deal materializes in about 30 days. Though the population growth rate is not as high as in many other states and the growth rate in the job also shows an average figure, the state is still a very promising marketplace.
The effective property tax rate of less than 1 percent, low labor rates, low insurances and average costs for infrastructure and accessories indicate good returns on the invested capital.
Arizona
The state boasts the third rank in the country when it comes to the appreciation of real estate. The good market fundamentals in the state ensure real estate dealings in an average of fewer than 30 days.
A 7 percent growth rate in population which is also the seventh highest in the country is enough to attract the investors to put in their money to build up the real estate portfolio.
The other factors like the good job growth rate of 11 percent, the average property tax rate of less than 1 percent, lower insurances and the average labor expenses in the state also make the state a genuine marketplace for the investors. Phoenix is the most sought-after place in the state.
South Carolina
South Carolina is coming up as a good destination for the real estate investments by the newcomers in the field as well as the experienced. Research and studies in the market fundamentals and habits of the residents have concluded that the median number of days on market for the listed properties is about 45 days.
Though this is taken very seriously by the investors, there are many more positive points about the demography that make the state a good place for the purpose.
The effective property tax rate is less than 1 percent and the income growth rate is a high 12 percent. These are enough to keep the investors tied to the state in order to expand the portfolio.
Which states are the best places to make commercial real estate investments? You might be surprised by the responses. Now is a great time to invest in commercial real estate. This is thanks to the current growth of the US economy. Commercial real estate has always been a profitable business opportunity.
What are the Emerging Trends for the Best States for CRE in 2024?
We have noticed that the following states have shown positive trends in investing in Commercial Real Estate in 2024
Texas
Texas is the largest state in the continental United States with a thriving economy. It is popular with businesses and entrepreneurs because of its business-friendly laws and low taxes. Demand for commercial real estate has surged.
This is due to strong job growth in cities like Austin, Dallas, and Houston. Texas is a great place to invest in commercial real estate. This is due to the strong demand for office, industrial, and retail space.
Florida
Florida is a great place to invest in commercial real estate because of its strong tourism, fast-growing population, and diverse economy.
Sectors like healthcare, technology, and finance support job growth. Many people want office, retail, and industrial assets. These assets are in Florida’s strong real estate market. Also, businesses and investors like Florida. It is a desirable place because of its warm weather and beaches.
New York
One of the biggest and most varied commercial real estate markets in the world is found in New York. Many types of businesses drive the state’s economy. They include finance, technology, media, and real estate. The New York City region is one of the most important commercial real estate markets in the world. It sees high demand for industrial and retail real estate.
The “work from home” trend has led to more office openings. This is a great chance for investors to buy assets with added value and/or repurpose them. Still, there is fierce competition in the market. But, wise investors have many chances to profit in this fast-growing setting.
Making the wise decision for selecting the state for commercial real estate investment
Commercial real estate investors and brokers surely have to consider many factors before targeting any state for investment or portfolio expansion.
Robust real estate fundamentals, including that of the housing market, income, and job growth, along with the population and demand growth, and even the labor and other associated costs, are to be considered before selecting the marketplace for investment.
But it should also be ensured that the uptrend will not be reversed anytime soon.
