The dust is still settling after two years of high interest rates, but CRE investors are finally moving back in now that the Fed is signaling rate cuts by mid-2026.
If you’re starting to re-enter the market, you may be wondering:
Where in the US does buying make sense in 2026?
Which states and cities still have the fundamentals to support a solid return?
Just because a place ranks high in a national report doesn’t necessarily mean that it’s the ‘best’ place for your capital. Not every market is the right fit for every investor, and not every investment goal leads you to the same map. In 2026, the best place to buy commercial property depends on what you’re actually trying to achieve.
Do you want steady income or long-term price growth?
Do you prefer stabilized properties with easier exits, or are you perhaps optimizing for tax efficiency?
Where should you invest in commercial property in 2026 based on your goals?
Tennessee
Tennessee, especially pockets in and around Nashville and Memphis, will still draw in investors who are looking for a mix of affordability and yield in 2026.
If you care more about steady monthly income than big resale gains, multifamily and industrial are still worth looking at.
Cap rates here are higher than in neighboring Sun Belt markets, particularly for older assets or value-add properties just outside the urban core.
Job growth is holding steady, and in-migration is creating demand for both rental housing and last-mile logistics.
It’s one of the few states where strong tenant demand hasn’t pushed pricing out of reach, so you can still find properties that cash flow well without overpaying.
North Carolina
Eastward in North Carolina, people are moving in and more industries are building out.
There’s a lot of growth in life sciences and finance in the Raleigh-Durham corridor.
Meanwhile, Charlotte is attracting corporate expansions and keeping pressure on office occupancy, which then spills over into demand for R&D space and multifamily development.
The fact that cap rates are rising here is not necessarily a bad sign.
It might even give long-term investors a chance to buy at lower valuations while rental demand remains strong. Are you looking beyond the next 12 months?
This can be a better time to enter.
Texas
Heading southwest to Texas, you will find a more diversified market with multiple entry points across asset classes.
The population is still growing, and large-scale infrastructure upgrades are opening new corridors for industrial and residential development.
If you’re interested in logistics or distribution, run your comps in markets near Dallas and Houston, and if you’re leaning toward residential income or office repositioning, consider screening active listings in build-to-rent and suburban office assets around Austin and San Antonio.
Cap rates haven’t collapsed, but they’ve held steady in areas tied to data centers and logistics.
Utah
This Mountain West stronghold doesn’t get as much attention, but its tech sector (“Silicon Slopes”) and highly educated workforce, combined with its stable governance, keep it on the list of the best states to buy commercial properties in 2026.
This is a durable, longer-term market with plenty of opportunities in suburban office and specialized industrial.
Cap rates are stable, and growth is steady rather than explosive, so it may be a good portfolio addition for conservative investors.
Florida
In the Southeast’s most migration-heavy metros, Florida’s relentless population growth and business-friendly tax policies prop up demand for multifamily and retail, especially in cities like Tampa, Orlando, and parts of South Florida.
Port-linked industrial submarkets also keep vacancy rates low, with cap rates holding steady thanks to high liquidity in the market.
Multifamily and retail tied to migration trends still perform well here.
Arizona
Arizona isn’t just sunshine and retirees anymore — it has transformed itself into a key manufacturing hub, especially with chip fabs and EV-related development near Phoenix.
Build-to-rent has also taken off.
Cap rates here are starting to rise, too, which may improve acquisition terms for yield-focused investors, especially in logistics corridors.
Georgia
Southern logistics powerhouse Atlanta is a strong pick for investors who are pursuing industrial or data center-adjacent investments.
Job growth in this part of the US should accelerate well into 2026, and the presence of Opportunity Zones allows qualified investors to reduce or defer federal tax liability, especially for investors targeting long holds.
Cap rates have held steady, which helps preserve yield consistency even as rents adjust.
Special focus: What are the best places to buy multifamily CRE in 2026?
Rent growth has cooled in overheated markets and expenses are up, so multifamily in 2026 will no longer be the free ride it was in 2021.
But if you’re the type of investor who is looking for durable income and long-term demand, there are still plenty of opportunities in markets that get in-migration from more expensive metros and have solid job growth across working-class and mid-income households.
We’ve listed a handful of metros that still check both boxes below.
Entry prices are still fairly reasonable, and rental demand hasn’t yet peaked in these workforce-driven markets:
- Tennessee – In Memphis and parts of Nashville, you’ll still find entry-level multifamily assets trading at cap rates above 6%, with steady demand from renters priced out of buying. Development is active, but inventory hasn’t flooded the market—yet.
- Indiana – Cities like Fort Wayne and Indianapolis consistently post 6–8% cash-on-cash returns with less price volatility than trendier metros. Operating costs stay manageable, and tenant demand is driven by stable employment and affordability.
- Alabama and Arkansas – Huntsville, Little Rock, and surrounding areas have become quiet cash flow markets with high occupancy and low purchase prices. Job growth in manufacturing and logistics keep the rental base stable.
- Kentucky – Louisville’s mix of education, healthcare, and logistics means demand is broad-based. Properties are still trading at relatively low per-door prices, and operating margins are better than in most urban cores.
These aren’t high-appreciation markets, but that’s not the point. They’re worth serious attention if your priority is monthly income.
They also offer a useful entry point for newer investors who want to build a portfolio of stabilized, easy-to-understand assets.
What will drive CRE returns in 2026?
You don’t need to predict the future to invest well in commercial real estate. You just need to follow the fundamentals.
Economic depth keeps a market alive when rates rise
Some cities bounce back faster from downturns because they build around advanced manufacturing, logistics, healthcare, and data infrastructure — industries that tend to hold up when rates rise.
And the best part? These industries rarely compete for the same space types, so the same market can support industrial, R&D flex, and professional services without oversaturation.
Migration creates demand
Population growth is the cleanest demand signal you’ll get when it comes to finding durable CRE opportunities.
But aside from looking at the migration numbers, you also need to look at who’s moving in.
Are young professionals and working families putting down roots?
These working-age households tend to stabilize rent growth in multifamily, BTR, office support services, and medical uses.
Tax and permitting rules often matter more than headline rent growth
Markets like Florida and Texas get attention for having no state income tax, which is why many beginners chase perceived yield in these areas.
But seasoned CRE investors go further by looking at local property tax burdens and how landlord-tenant laws are written.
If you’re buying in a state where it takes 14 months to get zoning approved or eviction protections are changing mid-lease, it doesn’t matter how fast rents are growing.
You’ll lose time and margin.
No infrastructure, no logistics
You can’t run a last-mile warehouse without roads or operate a hyperscale data center without a stable grid and fiber.
And you can’t attract top-tier employers without modern public infrastructure.
That’s why some of the best-performing states in 2026 are those that are continuously pouring capital into ports, power, water, and freight networks.
It’s not always easy to see these developments on a glossy CRE investor map, but if you go one layer deeper, you’ll find the markets where infrastructure spending is raising long-term land value and multi-tenant demand.
You need good CRE financing
Looking at deals in any of these CRE markets? Let’s talk strategy. Contact our team here at Private Capital Investors to tell us about your project.
As direct private lenders with a solid understanding of how the CRE market works, we look at the deal itself — not just the paperwork — and find ways to fund what traditional lenders won’t touch.
