Top 10 Real Estate Markets to Watch in 2025
In this discussion, I'll dive into the Top 10 U.S. Commercial Real Estate Markets to Watch in 2025, as highlighted by the ULI and PwC's Emerging Trends in Real Estate® 2025 report. We'll explore what makes these markets stand out, focusing on their economic strengths, population trends, and investment opportunities.
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Key Takeaways:
New Orleans has seen a 25-spot jump in the rankings, driven by its tourism industry, but still faces challenges with a recovering economy and susceptibility to boom-bust cycles.
Charleston has seen robust population and employment growth, driven by manufacturing, logistics, and tourism, but is facing affordability challenges.
Columbus, Ohio is a fast-growing, business-friendly city with a diversified economy and strong population growth, making it an attractive investment market.
Detroit has seen a remarkable turnaround, with its first population increase in 66 years, driven by revitalization efforts and a more diverse economy.
Manhattan has seen a strong rebound, with renewed vibrancy in the business district, though high housing costs remain a weakness.
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
Episode Transcript:
Tyler Cauble 0:00
This episode of the commercial real estate investor podcast is brought to you by my cre accelerator mastermind, where you'll get access to my step by step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way. Go to www dot cre central.com to learn more. Welcome back to the commercial real estate investor podcast live from the combo group studios. It is Tuesday, November 19. I just attended this morning the Urban Land Institute's emerging trends in real estate event with PwC here in Nashville, and figured, you know what? It's time to start talking about 2025 it there's a lot on the horizon for commercial real estate. So today we're gonna be diving into the top 10 markets if you are looking to invest in commercial real estate, or really just real estate in general. I'm going to be walking you through five market movers, and then the top five markets to be investing in and why. Let's have a conversation around it. This is based on the 2025 emerging trends in Real Estate Report from the Urban Land Institute and PwC that is linked in the description below, if you want to go and view it. It is free. It's a report that they put out every year based on 1500 give or take surveys and responses, respondents that they get from investors, developers, engineers, architects, people that are actively involved in the commercial real estate market, and their thoughts, that is how they come to this. So Question of the day, what's your favorite market for 2025 and why? I want to know, what markets are you investing in? What do you think has the most potential coming up in 2025 and why? Let's dive into our first market. So up first, we've got New Orleans. This is one of the market movers. Again, we're going to be counting down the market movers down to the top markets in order. Of course, New Orleans, no big surprise here. It is a very interesting destination, attracting millions of tourists annually, really, because of its distinctive cuisine and culture, revered as the birthplace of Jazz, its ranking in the emerging trends report has historically been below average. New Orleans hasn't really had a whole lot of luck since Katrina, but it's recently taken strides towards the middle of the pack, reaching 40 seconds. Second among all 81 markets for 2025 so not a major market by any means, not even in the top 25 but it moved up 25 spots, and it's from its previous ranking. So that means that there are enough investors, developers, commercial real estate professionals out there that think that New Orleans has enough going for it for it to jump 25 spots in a single year. That's really, really impressive. So it looks like the employment hasn't quite recovered to pre pandemic levels they were at. Let's see 565,000 around q2, of 2024. Which is still about 3.4% below q4, of 19 levels. This still recovering trend illustrates the local economy susceptibility to boom and bust cycles that New Orleans has not had a lot of luck with that over the decades, and it is there's not a lot of industry there that is really recession resilient, like you'll see, and I'm biased, but markets like Nashville, right? Because we've got a wide variety of industry in this area, the city's real gross metropolitan output has also declined. So again, not super attractive, but about 17 and a half million travelers visited the city and brought in just over 9 billion with a B dollars in 2022 which is still a little bit below the nearly 20 million that they saw in 2019 and close to ten billion but that is still pretty significant when it comes to the amount of Money that tourism is bringing into New Orleans. So if you are looking at investing in New Orleans, I would imagine something in the tourist sector is probably going to be pretty strong, right? That would be short term rentals, that would be boutique hotels. I mean, you name it anything, maybe even retail or industrial that caters to the tourism industry. So I mean, hey, if you're a tourism business in the Nashville area, you might want to start looking at New Orleans in Las Vegas as well, to expand out of market. The nice thing about New Orleans is that it is a very affordable place to do business. So Moody's rates, its relative cost of doing business at 90% Percent of the national average, which is pretty strong. That means it's far more affordable to do business there, which, of course, hey, businesses like people like makes it more affordable for them to live. Let's see. City of New Orleans has an outsized share of healthcare industry jobs as well, relative to the state and the nation. They also have a well developed port, pipeline and rail infrastructure being the only US city with a rail gateway that serves six major class one railroads. Hey, industrial flex space, probably very strong there. Of course, one thing you've got to worry about with New Orleans, and pretty much any coastal city, of course, is insurance costs due to climate hazards and risks. We are seeing more and more of these multi billion dollar climate events, and they don't seem to be slowing down. So that will be that will need to be a point of consideration for you as you are going into these markets, of course. So let's see both state and federal government infrastructure investments total more than $500 million going towards improving port capacity. That's pretty nice, right? So they're expecting to be spending a lot of money bringing in more and more imports and probably sending out more exports. So that, to me, says that's a pretty good sign for industrial real estate too. You'll see a lot of companies that are wanting to either open up distribution facilities there or temporary warehousing to keep those goods in and out. Net migration into New Orleans turns negative following 2024 losing approximately 34,000 residents through 2029 that's not a big number of residents to lose over the next five years. It's about, you know, 7000 give or take residents per year, but that's also not small. One thing that I don't like to do necessarily, is invest in any market that has a net migration loss, simply because that's a little bit scary to me, because you don't know where that's going to go over the next few years. So something to keep in mind if you're going to be investing in a market like Louisiana, New Orleans will likely remain dependent on boom and bust industries such as tourism industry and shipping for the foreseeable future. So a lot of interesting things in the works for New Orleans, but probably still, you know, on the fence as to whether that would be an investable market for 2025 and beyond. Of course, it's got a lot of cool things going for it, and just beautiful architecture. I mean, what a great city to visit. Up next, we've got Charleston, South Carolina, of course, with its historic charm and cultural vibrancy. Let's see what's going on. It's a critical hub for business and tourism and manufacturing in the South Carolina area, Metropolitan has seen robust population growth over the past decade. That's what we like to hear. That is what I like to see. Even if it's half a percent or 1% growth per year, at least, you are gaining people, not losing them. Let's see, they've gained nearly 200,000 residents over the last decade, rising to from the 83rd largest MSA in 2010 to the 71st largest in 2023 it's a pretty big jump. Let's see. The city attracts approximately 15 million visitors annually, accounting for $12.8 billion in economic impact. The growth in Charleston is underpinned by some pretty robust economic fundamentals. Employment increased at a compounded annual growth rate of 2.9% which is more than double the national average. That's good to see. Tourism is a critical part of Charleston's economy. I would know I have been to Charleston. It's a beautiful, beautiful place to visit, really cool to see. Can't wait to get back out there sometime here, pretty soon, the weather is great. It was, it was pretty awesome. They were, they were there. Charleston's post pandemic recovery has also been strong. Between August of 23 and July of 24 their employment surged by 5% geez, that's really, really high that put it at the second fastest growing job market in the nation, only surpassed by Merced, California. It's also a regional hub for manufacturing and logistics. One thing that you're going to notice as we're going through this is that industrial is going to be a highlight for probably every single city that we're talking about, because industrial real estate is booming. It's growing. We don't see it slowing down anytime soon. We won't be diving into asset types that are going to be thriving in this episode today, in 2025 but spoiler alert. And industrial is number one in the country. Again,
since 2021 manufacturing jobs in Charleston have increased by 21% manufacturing is growing in that area. Again, another great growth driver for industrial and that helps diversify the city's economic base. They benefit from the Port of Charleston. That's pretty interesting. We have two port cities to kick this off. Something to probably keep in mind, South Carolina ports has invested over $2 billion to improve infrastructure at the Port of Charleston. Wow, that's that's a lot of money. It looks like they're deepening the harbor to or they already deepened the harbor to 52 feet in 2022 which makes it the deepest Harbor on the East Coast. That's always nice, because that means that they can get bigger and bigger ships in for shipments. Not everything is positive for Charleston, though they are facing challenges as any city in the Sun Belt, is when you have rapid growth, you have rapid unaffordability. Looks like the city's median house pricing has surged over $520,000 Can you That's crazy. The median house is $520,000 so it looks like investors are very confident in Charleston's future. But as far as its affordability in the future, that is probably a little questionable, little question mark there. Up next we have Columbus, Ohio. That is a very interesting choice for me. I'm excited to see why people are thinking that Columbus is going to be a moving market to dive into. Looks like the city has a robust, diversified economy ranging from the North Orange district to the German village. Looks like business. Tourism and higher education attract over 51 million visitors. That's pretty wild. Looks like 2023 was a record setting year in terms in terms of tourism for Columbus, MSA has grown to be the 38th largest by market value of three spots from 41st in 2019 that's impressive to see. Let's see. More recent optimism has earned Columbus a position in the emerging trends movers and shakers listing for this year. So seems like people are feeling pretty good about Columbus, Ohio. City is resurging, which appears to be backed by fundamentals. Let's see. It was the fastest growing city in terms of population in 2023 Wow, increasing 1.1% year over year. That's solid. Since 2014 the city's population grew at a point 9% compounded annual growth rate and is now estimated to be the 15th largest city in the country. That's pretty wild. Metro areas, employment has expanded at 1.5% since 2014 compounded. The city's GDP has also increased compounded our annualized growth rate of 2.7% that's pretty strong. City is business friendly that I think that we're going to see a trend over the next decade that the cities that are the most business friendly are going to continue to attract bigger businesses, more tech, more of all types of industries, to be honest with you, because these businesses are now starting to realize, well, if we can work more remotely, or if we're just able to actually, you know, kind of work from anywhere, right, not even necessarily remotely, but as as technology starts to catch up to the way that we want to work, why would I be In a city that is not business friendly. I'm going to move to cities that are going to make it easy for me to do business, to hire people, to expand job growth, and, you know, whatever incentives that we need in order to do business better, right? So that's it seems to be something that is really in favor here for Columbus, Ohio, let's see, it's very affordable for a major market business, costs in the coastal gateway cities such as Miami can reach 200% that's insane, while costs in major Midwest cities like Chicago measure at 105% cost of doing business here in Columbus is only 98% of the national average. Imagine like Miami is 200% of the national average. Is twice as expensive to do business in Miami as it is anywhere else. Several Fortune, 500 companies maintain prominent presences within the region. Looks like after the chips Act passed, several leading technology firms relocated or located to that region, calling it the silicon heartland. Columbus's expansion is poised to continue. Moody's predicts that Columbus will be the beneficiary of migration patterns really due in part to its relative affordability. That's another thing that we'll start. To see here again, as the population starts to realize, well, hey, I could probably work from anywhere. People are probably going to start flocking towards the cities that are far more affordable. And we've seen a lot of cities here recently. In Nashville is not an exception, that have become unbelievably cost prohibitive, both for business, but especially on the residential side of things. I mean, when I first moved to that back to Nashville after dropping out of college, you could, I could rent half of a townhouse in Green Hills was like the nicest part of town for 800 bucks a month, unbelievably affordable. Now you can't even get a one bedroom apartment like under 1500 and of course, with where construction costs are going and vacancy rates, that pricing just continues to keep going up, so affordability is going to continue to be a big issue. Net migration into Columbus will be 13,000 people per year over the next decade. I mean, compare that to losing 34,000 like New Orleans. Well, Columbus is going to be a much more attractive investment, for sure. And I just, I think Columbus is better located to also avoid any serious climate risk, right? I mean, that's, that's going to be a big factor for a lot of people moving forward as they are looking at which cities to invest in. You know, are tornadoes, hurricanes, earthquakes? Are those going to be an issue here? Columbus, I don't believe, has too much inclement weather. All right? Up next, we've got Detroit that is a market that we have not seen on any positive lists for quite some time. I mean, I guess since, really 2008 but, oh man, they open it in the best way possible. Detroit, long seen as the poster child for shrinking cities in urban decay, has climbed 22 spots to become the highest ranked market in the Midwest, that's kind of wild, good to see it. You know, I remember 10 years ago, when I first got into commercial real estate, people were talking about, you know, getting up to Detroit and buying up as much just cheap real estate as you could, because people were literally just abandoning it and leaving it and going away. And so you could get swaths of both commercial and residential real estate for relatively cheap. And I remember there was a billionaire that started buying a bunch of stuff in downtown. Probably, he's probably pretty happy he started doing that. I mean, he's also probably the reason it came roaring back 10 years after emerging from the largest municipal bankruptcy in US history. Motor City is firing on all cylinders again. There's many positive signs. First population increase in 66 years in 2023 that's pretty wild. First time the city has actually seen net positive growth in 66 years. That's like two generations of I mean, come on. Revitalization of the long abandoned Michigan Central Station was completed in 24 and a global high end fashion retailer open store in downtown in 22 compounded annual employment growth has trailed the national rate by nearly 60 basis points. That's not too bad. Since 2014 population growth across the greater metropolitan area has stagnated since 1970 declining point 3% annually. Since 2020 the city's population declining nearly 65% over the past 60 years, more than 17% of the city's total land area is vacant. 17% of the city's total land area is vacant. That's, I mean, let that sink in. That is one out of every five properties is vacant. When you drive past a city block, there's at least one or two properties on either side of the street. I mean, I guess it depends on how big your city blocks are. If you're in Texas, you're gonna have 20 properties in a single city block that are vacant. They're saying over 20,000 homes have been demolished Since 2014 and 78,000 structures still remain empty. 78,000
I mean, hey, if you want to, if you got some cash and you'd like to just sit on it and wait for somebody else to do all the work so that you can then kind of kind of ride the wave. Detroit might be a pretty good spot to hang out, I guess it depends on how much you gotta spend. Detroit is known as the hub of the US automotive industry, and the big three are the region's largest employers. Automotive Research and Development has earned it the 14th spot in the United States for high tech employment. Government, education and health services sectors have driven recent employment gains, while the professional and business services, manufacturing, finance and information sectors have shed jobs. Detroit is the 14th largest metropolitan statistical area by population. Yeah, it has been off the radar, though, for real estate investors, especially those that are on the institutional side, wow, it represented just under point two 0.2% of the expanded NPI market value as of 2014, q2 total returns, though, I've averaged about 8.9% annually over the past 10 years. That's really not bad. I mean, that's about on pace with the stock market, give or take. But hey, if you want to throw in some depreciation on that as well, it's not too bad. Looks like they expanded NPI by nearly 280 pips. Self Storage, industrial medical office assets comprise over 70% of destroyed market value. Whoa, man, it is wild, like just reading about a market like this that was actually abandoned. I mean, for self storage, industrial and medical office assets to comprise over 70% of Detroit's market value. I mean, that's crazy. 10 year income returns average 6.7% annually, 210 bips above the index. That's really interesting. I mean, oh, here we go. Dan Gilbert, he was the billionaire behind Rocket Mortgage, who has been revitalizing downtown. He's invested billions over the past decade to revitalize downtown. Detroit. Acquired more, oh my gosh, acquired more than 130 buildings. 130 buildings. I don't even know if I've sold 130 properties in the last 11 years in my brokerage like that's that's amazing. Relocated the rocket headquarters to downtown in 2010 I mean, that was a great move. I mean, look, if you've got the cash and you've got the time going out and finding these, these abandoned markets, and hey, buying up buildings, fixing them up and paving your own way, you know, making your own way is, is a great way to invest in real estate. I mean, I like that, right? I mean, look, if you buy 130 buildings, even if the town has been abandoned, and you start fixing them up and slowly start bringing people back, you're going to turn the market around, right? It just depends on, I mean, there's a lot of factors. There's a lot of more complicated issues with that. And you know, we could talk for days and days about where that could be, but, you know, we'll see. Chas is saying this list is comprised of only liberal garbage cities. Chaz, you have a sad, sad existence. Liberal garbage cities bring in the overwhelming majority of economic growth and development to the United States. So I'm sorry you feel that way. That's hilarious. Comment though. Captain Kurt, good to see Kurt. I love North Houston woodlands area. Well, Houston may or may not be on this list. Good for you to know we will be getting to that here in a minute. So I don't know, Detroit's really interesting. Looks like 33% below national average for the median single family home price, which was only $280,000 so Chaz, considering you have a sad life, maybe you should go buy a house there. I bet you could probably afford that, even though it is a liberal garbage city market movers Manhattan. Let's get into the next one. This is, this was an interesting one to me, because, I mean, New York City is obviously a very strong market, and it always will be, just because it is so damn big and it's international. But Manhattan rocketed up the emerging trends rankings 20 places to land at number 11 overall in 2025 to put that in perspective, like after 2020 Manhattan fell off the map. I mean, absolutely fell off the map. I don't even know what they fell down to, but it was they got rocked. And so for them to now be 11 out of the 81 I guess cities that are being tracked pretty strong, Jersey City, uh, jumped up 27 spots to 19th. Brooklyn jumped up 14 spots to 14th, and Long Island jumped up 18 spots to 20th. So pretty, pretty good to see. I know Bob knacker was probably very happy about that. The nation's largest city has long been a preeminent global financial center. The financial services sector remains a stalwart of the local economy. Let's see, after a prolonged recovery, after the COVID pandemic, which basically had a brief recession for them, New York is getting back on track. Metro growth, job growth continues at a steady clip, besting the nation in all but one quarter over the past three years, employment gains remain concentrated in lower wage education, health, services and leisure and hospitality sectors. Office using sectors continue to post declines. It's very tough to find a market today where the office sector is growing and is strong. I would imagine if any office sector. Is actually going to find a way to come back. It's probably going to be Manhattan, but we'll just have to wait it out and see. Right let's see indicators point to renewed vibrancy in Manhattan's once beleaguered business district. Security badge swipe data indicates higher office use than the major city average. That's pretty interesting. Renewed leasing activity is driven by financial sector tenants. Makes sense. The guys with the money are making all the money and can afford to get the office space. I mean, look, personal anecdote here, I fully understand that I I have to work in an office. I don't like working from home. It's really not my thing. So, you know, take that for what it's worth. I know a lot of other businesses that are doing that. I have a three story, 28,000 square foot office building here that I own where we I bought it for 40 at 40% occupancy back in 2019 it's 100% occupied today. Now we focus mostly on small business owners, and we're 10 minutes outside of the urban core, I think that's pretty good. That's where people want to be high. Housing costs are a weakness for New York's economy. Relative cost of living is 120% of the national average. It's not too bad compared to some of the other markets that we'll probably see, but higher return to Office rates and more favorable demographic trends have caused a snapback in Manhattan, apartment demand that's got to feel good, especially considering how many apartment units have been built in this country over the past couple years that haven't been leasing up as fast as all of the apartment developers had hoped they would a jump in international immigration and slow down and pronounced out migration observed during the pandemic. So you had a lot of people that were leaving during the pandemic saying, You know what, I'm done with the shutdowns. I'm done with New York City. I'm going elsewhere. It looks like that has pretty much stopped, and now they're starting to see a boost to the local labor force and demand for various services. Net out. Migration from New York is back to resembling pre pandemic trends, which makes sense. I mean, they're, they're open. I mean, it's fully back to normality. For the most part, we'll still see some echoes here and there of the pandemic reverberating throughout commercial real estate in general. But for the most part, I think that we're, we're kind of beyond that. As of 2023, international business travel still lags pre pandemic trends by 14% but on the bright side, domestic leisure travel has nearly recovered $48,000,000,000.20 23 eclipsed the 2019 level. New York is on the right track for the near term, but growth is expected to moderate. I mean, you know, it's not a surprise. It's the same thing, same story that New York City's always had for decades. I mean, you've got high cost of living and doing business, which is, you know, 153% of the US average, still more affordable than Miami. Means that, you know, job growth and population are probably going to be flat the next five years. But that's not bad, right? Investors are so confident that the MSA will continue to grow and recover. All right, let's get into the markets to watch. These are the top five markets in the United States to watch. And coming in at number five, and really, breaking my heart, is Nashville. You know, it's not bad, though. We had a really, we had a hell of a rod. We had three years in a row. The only city in the 46 years that they have been doing, that they have been doing this report, Nashville is the only city that ever got number one, three years in a row.
So, you know, I guess, I guess all things must come to an end game master saying Long Beach is my favorite market, because that's where the business is. Yeah, hey, Long Beach isn't too bad. I I've never been out that way, but I do have some friends out there. He's saying, don't forget to like the live and consider subscribing, pushing out this awesome information to a wider audience. Appreciate your Game Master. Yeah, if you're enjoying it, don't forget to LIKE subscribe this. This entire channel is dedicated to teaching you how to invest in commercial real estate and going through what matters in commercial real estate right now, we're talking about the markets, what markets you should be investing in, or at least considering in 2025 I mean, national is great. You know, of course, I'm biased. I'm in Nashville, but I mean, look, 15 million tourists flock to the city annually. The wild thing about that is, like, that's basically 15 million visitors that go to a five block radius downtown to go to Broadway. So it gets pretty nuts. Over the past 10 years, Nashville has grown from the 44th largest market to the 29th largest market by market value, posted annualized total returns of 9.4% over the last decade. It's not bad. I mean, 9.4% it's really damn strong. I mean, to put that in perspective, because real estate. Historically grows at about 3% a year, right? So so to to annualize 9.4% growth for 10 years is pretty remarkable. City's growth in stature appears to be well supported by fundamentals. Employment has expanded at a compounded rate of 2.9% since 2014 which is almost three times the national average over the same period. Let's see, COVID did have a detrimental impact on tourism in 2020 and 2021, I'll never forget it was probably three, four weeks into the pandemic shutdowns, and I decided to go drive around. And I wish I had taken my drone, and maybe I did. I just, I don't know if I could find the photos, but I went down to Broadway and just to look at what was going on. And it was so eerie seeing that place. Because ever since I can remember, Broadway has always been bustling with people. I mean, obviously back in 2013 nothing like it is today, but there's always been people there. And so when I went down during the pandemic and saw everything shut down, no music playing, nobody outside, it was a very bizarre time. It was interesting to me. That's what made it really real to me, was not seeing anybody down there. So that was interesting. Let's see cities, real gross metropolitan output has similarly expanded by a robust compounded annual growth rate of four and a half percent since 2014 which which does put it at the 14th fastest growing MSA in the nation by that measure. And Nashville is not a big city. I know, you know, it's been at the top of all of these lists, but to put it in perspective, I mean, Nashville proper has like 700,000 residents, right? I mean, I think in the MSA, we're a little we're around 2 million, but 700,000 people, it's really not a big city, still an affordable place to do business. I mean, 99% of the national average, so Nashville is basically barely below the national average in terms of cost of doing business, which is which is pretty good, right? I mean, look, New York, San Francisco, in Miami rated 153 200 and 114% respectively. So, you know, people have I had a a business owner reach out to me from California wanting to get an idea of what lease rates would be in Nashville. And he told me his budget. And I was like, Dude at that, but it was like, 24 bucks a foot, basically. I was like, Man at that, at that budget, I can get you about half the space that you're looking for in the areas that you're probably going to want to be. And he was like, what that's, that's, like, California pricing. I was like, Yeah, man. I mean, Nashville's, yeah, Nashville's not just because, you know, we just started wearing tennis shoes and we got running water a few years ago. Doesn't mean that we're cheap. Nashville is really, really high up there. But, I mean, apparently it's not bad. 99% of the national average. Let's see. I mean, of course, Nashville rates well on taxes. Taxes. We're one of seven states that levies no state income tax on individuals. We have a modest top statutory corporate tax rate of six and a half percent, which is higher than Florida and taxes, but lower than California, New York, Washington, DC. So as far as major metros go, pretty good. We do. Oh, interesting. We possess an outsized share of manufacturing jobs. We do have a lot of automobile here. Nissan is here. I don't know there are several other ones, but, I mean, that's just the one I can name. Affordability remains a national issue. Nashville's position and could help the city maintain better than average economic growth over the coming years. And here's the thing, Nashville can continue to expand. We've got plenty of land. The problem is just the infrastructure getting out there. They're saying that the city's meteoric rise is likely to slow. That's rude, honestly. Let's keep this going as fast as we possibly can. Net migration into Nashville will moderate. It has been insane. I mean, look, over the last decade, we've seen unbelievable growth. I mean, it depends on who you ask. Everybody's got a different answer. 60 people a day, 80 people a day, 3000 people a day are moving to Nashville. It's probably closer to 80. But, you know, who knows? So I mean, for it to go to 15,000 people per year of the next decade, down from a peak of 39,000 people a year. Hey, not too bad. You know what? I'll take it. We could all use a little break and a deep breath. Median home price has risen to almost 500,000 which goes to six times the MSA is median income. I had a here. Here's the interesting thing. So Nashville's median income is now over $100,000 like in not the MSA, the Nashville Davidson County proper is over $100,000 and a. Nice party trick that I like to drop on people is that 80% of Nashvillians qualify for affordable housing. 80% so if you don't think that you need affordable housing, or that affordable housing doesn't impact you, it does. If you make $80,000 or less in Nashville, you qualify for affordable housing. So vote for affordable housing. We need higher density. Coming in at number four, Tampa st, Petersburg, very interesting market, because obviously this was done in the summer before the hurricanes hit. I would imagine now that it has been hit twice in the past couple of months that Tampa st, Petersburg would probably not be number four on the list. It's probably going to be dropping quite a bit next year, simply because the climate risk right? I mean, again, we're getting into these crazy storms that are really damaging some of these commercial properties and make it really difficult to do business in and these insurance agencies aren't able to justify insuring these properties. But you can't blame them. I mean, hey, look, I get it. They need to make money too. I've got my own problems with insurance agencies because I think it's total ripoff. They fight you every time, no matter how legitimate your claim is. But, I mean, come on, when you got two hurricanes coming through, they're going to have to raise rates. But let's, let's talk about what they said, why they said Tampa would be number four. Sunny climate, year round. Sports, no state income tax, booming economy. It's a long time draw for both workers and retirees alike. I mean, it's an interesting area, right? It's nice weather, you know, if you if you don't ever want to have a winter, which, you know, I'm one of the weirdos that enjoys the cold weather and having four seasons, if you don't like four seasons, Tampa is a great spot. Moved up 14 spots in the emerging trends US markets to watch over the past year, most improved ranking among Florida's major metro areas. Tampa model is an enviable economy with strong growth, high paying job drivers and economic diversity. Population in the MSA grew one and a half percent a year from 2013 to 2023 approximately two and a half times the national pace. Would be interesting to see, though, how much it grew since the pandemic, because the flight to Florida, you know, after the pandemic, was significantly higher than it was before. Let's see, job growth has nearly doubled the national pace over the last 10 years. Metro area is driven by white collar jobs, particularly in the financial services sector, private office using jobs, is 39% higher in Tampa than in the United States overall, while financial services jobs share 59% higher here. That's pretty interesting for noteworthy finance and insurance companies with over 5000 jobs in the metro area. Uh, uh, interesting. Oh, wow. Despite all of that, it still ranks as the fourth most diverse job industry, uh, among the 390 ranked MSAs. It's pretty interesting. See, housing affordability is perhaps Tampa's greatest headwind. Relative cost at 111%
of the national average, insurance expense now ranks among the 10 highest nationally. That's on the homeowner side, I would imagine now it's probably higher again this, I mean, this was all really put together this summer. Just came out here this past week, rising costs might slow in migration from 50,000 to 70,000 in the metro area. Let's see more than 1 million residents. Some relief will come from lower interest rates. I mean, we expect pricing to come down a little bit, maybe, but house okay, let's see, with house prices up 66% in the four years ending July 2024 that's crazy. 66% in four years. I mean, Nashville's housing prices went up 50% since the pandemic. That's also crazy, but 66% in four years. I mean, even if you had no idea what you were doing and you bought a house in 2019 I mean, good for you overall, their job forecast, job growth forecast is at 2.3 times the nation's five year forecast. So hey, that's a good thing for Tampa real estate. Look, as I said earlier, any city that is increasing its job growth that is bringing people in that's going to be a good city to invest in real estate. So something to keep in mind, uh, Game Master saying, I'm down for no winter. I feel you on that one. Can't leave California, though the weather is too good. I. Uh, he's saying I missed it. Where are we pulling this data from? Good question. So the data, all of the these reports, are from the Urban Land Institute and Price Waterhouse Cooper each year they do the emerging trends in Real Estate Report. So this is for 2025 All right, let's get on to number three, Houston. Captain Kurt, I know you're building some some flex space out in Houston, so here you go. Man, it's doing pretty well. Houston's recognized for its rapid expansion, which, damn, Houston was already big. I mean, you can't like, if you've ever tried driving around Houston, it's a miserable experience. It's just so big. I mean, I remember when I was a kid, you know, Nashville had one area code, Houston had like four. And I just remember thinking, like, how could a city be so big they have four area codes for your phone? It's crazy. Now, I'm sure it's got like 20 area codes. Let's see population growth high. New economic forces include green energy, healthcare, technology and aerospace, Metro economies. Transformation to an international hub has attracted corporations and investors alike. 26 fortune 500 companies call Houston home, which is the third highest of all metro areas in the country, this is Houston's first time to rank in the top 10 markets in 10 years, although it had moved up to the top 15 markets in the last two years. So Houston has been steadily growing, but congratulations to them on being in the top five. Houston's economy has grown more diverse and less dependent on energy. It used to be back in the day, if gas and oil, you know, took a dump, Houston was in not so great of a spot. They always have had a strong medical presence, though, but it looks like they have started to diversify, that even more employment has expanded at a slightly faster pace than the nation over the last 10 years, thanks to outsized growth in several private sector industries, health care has been a major contributor to the Metro area's diversity as the sector has expanded to meet demand, Texas Medical Center is one of the largest medical complexes, oh my gosh, spanning 50 million square feet and home to 120,000 employees, 120,000 I mean, to put that in perspective, when Amazon announced, like, I don't know what, five or 8000 jobs in Tennessee, it was the largest jobs announcement Tennessee history. 120,000 employees. That's crazy. Let's see. It's also a hotbed for research and healthcare innovation. The Port of Houston is the largest port in the country in terms of tonnage, and the 16th largest in the world. I did not know that. I didn't know that that makes sense as to why Houston is so damn big. It's the 16th largest port in the world that's wild. More than $439 billion in statewide economic value come from that port. There's about 20% of Texas' GDP That's wild. Let's see current population of more than 7 million. That's 10 times the size of Nashville, Houston. MSA is the fifth largest in the nation, second largest in Texas, behind the DFW Metro plaques. So to be fair, if you want to count DFW as two separate entities than Houston, is by far the largest. Houston MSA saw the second largest year over year population gains in the country, surpassing other fast growing metro areas like Atlanta, Orlando, Charlotte and Phoenix. That's really surprising to me. Maybe I'm again, I'm probably biased. My dad lived in Houston for eight years when I was growing up, and so I used to go visit it quite a bit. And man, I always found it to be just a miserable city. There's a lot of cool things going for it, though. I mean, look, calachis, that's where I fell in love with collages. Great stuff going for it, but Houston is basically a giant swamp. It's way too hot. The mosquitoes are the size of birds. I just not, not for me, not for me. Man, Emily, that's coming from a nashvillian. It is. We live in a basin here too. It's a bowl of soup. Let's see, areas population will grow by 1.4% annually over the next 10 years, 100 basis points faster than the nation's expected pace over the same period. Cost of living index is 28% below the average of the most populous MSAs. That right there is probably what is contributing to massive growth in this Metro cost of living is 28% lower than the average metro area also boasts above average diversity, with more than 90 nations represented in its population. Diverse community is one of the factors that drove Houston to overtake Miami uh. For foreign multinationals to do business. That's pretty interesting. Metro area's existing energy infrastructure and dominant port system position it to be a leader in the nation's transition to green energy. We shall see. I mean, hey, if we get tariffs on all of these imports, maybe Houston could take a big hit. Be interesting to see. Hopefully, that never happens. Coming in number two is Miami, surprising, considering we just talked about how it was 200% more above average to do business there. But hey, Port Miami is the world's second busiest cruise port by passenger count, edged out only by Orlando to the north. That's pretty interesting for Florida to have two of the biggest passenger cruise ports, less well known as the city status, is a major cargo port. Many goods passed through Miami warehouses on the way to and from the Caribbean and Latin America. You know? You know what's interesting? Okay, rent growth in logistics reached three and a half percent per year through 2028 the highest among the nation's top 50 markets. You know, it's interesting in in every market that we've talked about so far, not every market, but in a majority, a surprising number of markets that we've talked about so far, ports have been a recurring theme. So it seems to me like, for whatever reason, all of these other investors, developers, everybody surveyed, is putting a lot of credence to cities that have high import, export capabilities. Makes sense. I mean, obviously, if you're going to have a big port, you're gonna have a lot of international business going on there. But I've never, I haven't noticed that trend in, you know, the past few years of looking at the Urban Land Institute's data. I mean, this is pretty interesting information to see that, you know, hey, we've got got cities with ports that are all ranking pretty highly, so I don't know. Food for thought. Demand from international rivals and wealthy buyers alike has driven explosive growth in Miami's housing market. Homes are 80% 80% since the onset of the pandemic, 80% man. How? How can home prices go up almost double in four years? I mean, coming up on five, I guess it's four and a half years. But I mean, look, if you don't think there's an affordable housing crisis in this country, and we have home prices in certain metros that have risen 80% they have doubled almost in five years. That's crazy, because guess what? Median, median wage growth has not even remotely come close to that. So people aren't making enough money to be able to afford these anymore. So I don't know something's gonna break this, combined with a subsequent 400 basis point rise in mortgage rates has sunk housing affordability to a four decade low. Relative cost of living is 122% of the national average, even higher than New York City. Miami
has become one of the few Florida markets experiencing domestic net out migration, primarily to more affordable communities in the state. Makes a lot of sense, right? Population growth in the metro area expected to be between half a percent and 1% per year. This is growth for at least the next five years, despite cost driven net domestic out migration. So despite the fact that people are leaving the city in droves to go find a more affordable place to live, the population growth is still positive. They are still saying, hey, there's enough people moving here to do business that is going to be strong. Let's see. Remains to be seen whether Miami's performance will be sustained. The city's coastal geography and subtropical location render it especially vulnerable to climate risk. High home prices may drive even more international migration to inland locations. Undeniable though, that Miami remains a desirable place to live and work. I mean, look, Miami's cool. It has been cool since Will Smith wrote a song about Miami back in like, the 90s. I mean, come on, it's, it's great. It's a great spot to visit, but it's, it's just too much for me. My brother moved there this past year, and I think he's, I think he's liking it, but come on, it's tough to be Nashville. It is tough to be natural. All right, coming in at number one, what do we think it's going to be? Dallas? Fort Worth DFW, the largest, if you take into account the metroplex, it is one of the largest cities in the country, the most populous MSA in the state of Texas, fourth largest in the nation. DFW is. The fourth fastest growing city with a population increase of 6.1% between 2020 and 2023, trailing only Jacksonville, Raleigh and Austin. 6% over a few years is really, really high. It's pretty wild. The growth that DFW has seen over the last 2030, years has been astounding, and it's it's really interesting to see how two cities can grow so big that they basically meld into one. I mean, it is, it is basically ubiquitously known as Dallas Fort Worth, right? It used to be Dallas. It used to be Fort Worth. Now it's DFW. Given its size and continued demographic growth, it is not surprising that real estate investors real estate investors had have targeted DFW. I've got students in the in the Siri accelerator mastermind that are just they're going all over DFW. It's real. I've learned a lot about this market because we're looking at deals in different sub markets around DFW with them. And it is astounding like this does not do it justice to how much growth is actually going on in that market. It's consistently ranked in the top 10 for the last six years, metro area seen a solid annualized five and 10 year returns of 7.9% and 8.8% respectively. Pretty high, not as high as Nashville, though. So you know, take that for what it is, total employment has grown 11.2% since February of 2020. Again, fourth fastest among major metro areas and only behind other Sunbelt piers, Raleigh, which grew 13% Charleston, which was 13.3% and Austin, I can't believe this, Austin grew 17.3% employment over the last four years. That's wild. 17, 17% employment. How do you even find that many people to give jobs to their economic base is pretty diverse, with banking, commerce, insurance, telecommunications, technology, energy, healthcare, logistics, whatever else you got, it's all there. Apparently. City is home to 23 fortune, 500 companies. The fourth largest concentration in the nation benefited from its own size and diversity of economic activity. And it's also just really easy to get in and out of the DFW airports are great, nevertheless remained relatively affordable. That's pretty nice. Cost of doing business 102% of the national average cost of living at 113% of the national average. Fort Worth is slightly lower, at 97 and 105% respectively. It's pretty nice. I like Fort Worth. By the way, I'm all in on for on the Fort Worth side of the the Dallas versus Fort Worth fight. So if anybody wants to fight me and come on here and say that Dallas is better than Fort Worth, please jump in the comments and make your argument so that I can humiliate you. Fort Worth is really cool. If you've never spent time in Fort Worth proper like Dallas, fine, whatever. Big Metro City, it's great. Lots, a lot going on, but you can pick Dallas up and drop it in pretty much any I'm gonna have some somebody getting upset with me about this, I know, but fine, whatever. It's my podcast. You can pick Dallas up and drop it in any state and not notice the difference, like it just fits in Fort Worth is exactly what you expect Texas to, look, sound, feel, smell like, I mean, it's everything like. Fort Worth is really, really cool. Next time you're in the area, go down to the stockyards. Go get go get lunch or dinner at Joe T Garcia's. It's pretty badass. My dad lives there now. He and my mom both went to TCU, so I've been going to Fort Worth for quite some time. That's way cooler than Dallas. We all know that median home prices in Dallas have increased almost 38% since q1 of 2020 to $382,000 they're still roughly in line with the median sales price of 400 across the nation. So that's really not bad. That's very affordable. I mean, actually, it's insanely affordable. Is that same house in Nashville is $120,000 more, about four to five times the median household income in the metro plaques. So not quite affordable in absolute terms. So it sounds like it's about as affordable if you're making the median income as you would in either city, but less unaffordable than other major housing markets. Combination of affordability, growth and economic diversity should continue to attract new residents and businesses to DFW, the climate risk in the form of heat stress and fire may challenge the MSA in coming years, that's dramatic climate risk in the form of heat stress and fire. So I think it was last summer they had like an entire, like, 30 days over 100 or 110 degrees. It was so hot, which I can't even imagine. But. Yeah, that's the first time that I've heard. And again, to be fair, I don't live in Fort Worth, but to hear about fire being a potential challenge, here's, here's what we talked about today. And I'm gonna, you know, we'll wrap that up. So there it is, for for Dallas Fort Worth. Number one, I do love that market. I've got a lot of students that are interested in that market. It's a great market. So in terms of of just future outlook on all cities, one thing that I thought was really interesting in the conversation earlier today was that no city in the United States is likely safe from climate risk. And they use the example of Asheville North Carolina, right? I mean, it got hit by a hurricane Asheville, North Carolina, which is inland about as I mean, far as you can get, right? I know you can get further in Nebraska and, you know, North Dakota, whatever. But bear with me on how I'm saying it here. So I mean, Asheville, North Carolina, not a city that would ever normally worry about a hurricane. Got hit really, really hard, really hard. And so I think that that made a lot of investors kind of take a step back and realize, like, Okay, I'm going to have to add climate risk to how I look at the my investments, because you just never know what kind of major storm or whatever is going to come through. Apparently, in Dallas, it's fire and cause some issues. So something to keep in mind as you're moving forward into 2025, and looking at other deals, let's see Game Master. Shout out to Houston. Shout out to Houston. Good for them, man, good for Houston. Still wouldn't live there. Captain Kurt, two more offers on land this week. Demand is high. Houston is crushing it in terms of transactions. I mean, we went down there. That's, that's where Kurt and I last saw each other. Was down in Houston. We're at an industrial flex event out there. It was, it was pretty great. It was a lot going on. I've got a, I've got an investor right now that's buying a deal out in Pinehurst. Mo was saying, watch out for Texas. Would watch out for Texas. They're saying we live here, and we're at $14,000 a year on property taxes, including M, u, d, for a $475,000 home, looking to move in 2026, for sure, that is wild. Yeah, property taxes and taxes are high. I mean, that is, that is, that's one thing that, I mean, look, if you're looking at investing in, you know, Tennessee, Texas, Florida, I mean, overall, I think Tennessee is actually more attractive than the other two. Reason being, Texas has higher property taxes, Florida has higher risk of climate events. Tennessee. Come on, man, give me a call. Let's, let's do some deals here. I'm always looking for new partners or people to do deals for. Got a great brokerage team. Shameless plug again, my podcast. Let's see Game Master saying it's no Nashville, I guess, talking about Houston maybe way cheaper than Dallas too, right?
I'm not sure. I don't know. Dallas seemed like it was more affordable than Houston, but who knows. Anyway, guys, thank you for joining me. I'm diving into 10 markets that you should be watching in 2025 hope. This was hope helpful as you are planning your year. If you're looking at investing within your market, and you're within these 10 markets, there you go. I hope this information helps you. If you're looking at investing outside of your market, again, I hope this information helps you. I would strongly consider Texas markets just in terms of the growth. If you can figure out the property taxes thing, great, but DFW is crushing it. It's growing strong. I like that market a lot. I think that it definitely deserves its number one spot on the list this year, which, again, is hard for me to say, being a Nashville boy, there is a lot of information in these in these reports. This report is 138 pages long. We only covered 10 of the 138 pages. So I will be doing more live streams over the coming weeks, diving into what the Urban Land Institute and Price Waterhouse Cooper is saying is trending in commercial real estate. So we'll be diving into asset types. We'll be diving into trends, overall economic trends, and we're gonna have some fun with it. So come join me live. Let's make fun of Chaz for you know, not liking any of the cities around this list, sorry, Chaz, I don't make the list. Man, I do agree with it, though. Don't forget to like and subscribe if you are enjoying these live streams. And I'll see y'all in the next one this
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In this discussion, I'll dive into the Top 10 U.S. Commercial Real Estate Markets to Watch in 2025, as highlighted by the ULI and PwC's Emerging Trends in Real Estate® 2025 report. We'll explore what makes these markets stand out, focusing on their economic strengths, population trends, and investment opportunities.