The National Association of Realtors (NAR) has introduced a new commercial real estate demand index that analyzes economic and demographic data across more than 300 metropolitan areas, focusing on office, industrial, retail, and multifamily sectors. This index incorporates local employment trends, population growth, and migration patterns using data from the Bureau of Labor Statistics and the Census Bureau to project future commercial real estate demand. South Carolina currently ranks as the top state for prospective demand, highlighting strong growth in its real estate markets.

The index reveals St. George, Utah, as the leading metropolitan area in commercial real estate momentum, driven primarily by rapid office employment growth alongside strong population increases and above-average industrial demand. Unlike some previous market evaluations, this index highlights the rising potential in smaller and midsized markets such as Fayetteville, Arkansas; Huntsville, Alabama; and Spartanburg, South Carolina, which are seeing notable growth across various sectors.

By comparing current data to the 2022 peak migration boom, the index notes that only Raleigh, North Carolina, among major markets, has maintained stronger momentum over recent years. Conversely, formerly red-hot markets like Austin, Texas; Miami; and Naples, Florida, have experienced significant declines in demand since 2022. This trend underscores a broader shift in commercial real estate focus from large coastal cities to rapidly growing Sunbelt and smaller metropolitan regions.

The report also highlights sector-specific leaders in demand, such as Salem, Oregon, and Fairbanks, Alaska, which top the industrial sector rankings. NAR’s principal economist, Nadia Evangelou, stresses that the index provides a data-driven signal of where demand is building rather than a direct recommendation to buy. Investors seeking opportunities may find better prospects in these growing smaller markets rather than traditional large metropolitan centers like New York or San Francisco.