St. George Tops Commercial Demand Index as Coastal Markets Lag

National Association of Realtors launches index tracking future commercial demand across 300 metro areas, ranking South Carolina highest among states.

By the Family Office Real Estate Daily Desk·Monday, August 31, 2026·1 min read

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The answer · checked against CNBC

Which U.S. markets have the highest future commercial real estate demand according to the new NAR index?

The National Association of Realtors has launched a commercial real estate demand index covering more than 300 metropolitan markets across four sectors — office, industrial, retail and multifamily. St. George, Utah ranks as the strongest metropolitan market overall, driven by the most significant office employment growth in the nation. South Carolina ranks highest among all U.S. states in future potential commercial real estate demand.

Key facts

The National Association of Realtors released a new index measuring future commercial real estate demand across more than 300 metropolitan markets, with separate measures for the office, industrial, retail and multifamily sectors.
St. George, Utah ranks as the strongest metropolitan market in the NAR index, driven by the most significant office employment growth in the nation, according to the NAR.
South Carolina ranks highest among all U.S. states in future potential demand for commercial real estate, according to the NAR index.
Raleigh, North Carolina is the only major U.S. market that is stronger today than it was in 2022, the peak of the pandemic migration boom, according to the NAR index.
NAR principal economist and director of real estate research Nadia Evangelou said large coastal markets including New York and San Francisco are still generally weaker than fast-growing Sunbelt and smaller markets in the index.
The NAR index uses government data from the Bureau of Labor Statistics and the Census Bureau for population and migration to inform its rankings.

St. George Tops Commercial Demand Index as Coastal Markets Lag — Image: editorial illustration · Story sourced from CNBC

St. George, Utah ranks as the strongest metropolitan market for future commercial real estate demand, according to a new index from the National Association of Realtors. The index measures economic conditions across more than 300 metro areas, with separate scoring for office, industrial, retail and multifamily sectors.

The association uses government data from the Bureau of Labor Statistics and the Census Bureau to track population, migration and sector-specific employment growth. For office, the index measures growth in professional and business services jobs. Industrial demand tracks manufacturing, transportation and warehousing employment. Retail incorporates retail trade, leisure and hospitality job growth. Multifamily scores population growth and net migration, both domestic and international.

St. George leads the nation in office employment growth and shows very strong population growth and in-migration, Nadia Evangelou, principal economist and director of real estate research at NAR, said. Its industrial demand is above average, she said.

South Carolina ranks highest among all states for future commercial demand potential. The index also highlights smaller markets including Fayetteville, Arkansas, Spartanburg, South Carolina, and Huntsville, Alabama. Huntsville has one of the strongest multifamily scores in the nation, Evangelou said.

The index compares current 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. Austin, Texas, Miami and Naples, Florida have all declined markedly since 2022.

Large coastal markets are still generally weaker than the fast-growing Sunbelt and smaller markets in this index, Evangelou said. Salem, Oregon and Fairbanks, Alaska rank highest for industrial demand. Fayetteville is seeing broad-based growth across sectors.

The index does not recommend outright purchases but shows where the data indicates momentum is building, Evangelou said. The association launched the index to provide a forward-looking signal for commercial investors evaluating metro-area allocations.

The Deployment Angle

Family Office Real Estate Daily Desk · our analysis, not the source's

The NAR framework argues for underwriting secondary-market deals with population and job-growth lenses rather than extrapolating coastal-market cap-rate compression. St. George's office employment trajectory suggests exposure through a programmatic joint venture with a local sponsor who can source professional-services tenancies, rather than a blind commitment to a multi-metro fund that blends Utah with declining Florida allocations.

Raleigh's status as the sole major market stronger than its 2022 peak invites direct ownership or a separate account concentrated on that MSA, particularly in multifamily and last-mile industrial. The index implies caution on co-GP structures in Austin or Miami that underwrite rent growth off 2022 comps. If a sponsor is modeling Austin rents at 2022 velocity, the deployment angle is to pass or negotiate a lower basis.

Huntsville's multifamily ranking and Fayetteville's broad sectoral strength point to diversified exposure via a programmatic vehicle with the sponsor committed to those metros, not a discretionary mandate. The arithmetic: if a sponsor targets 15 percent IRR on a five-metro portfolio and three of those metros have weakened since 2022, the equity cheque should reflect downside in the lagging markets. Build that into the hurdle or narrow the geographic mandate to metros the index scores above median.

Questions this story answers

01What is the top-ranked metropolitan market in the NAR commercial real estate demand index?

St. George, Utah is the top-ranked metropolitan market in the NAR index. Nadia Evangelou, principal economist and director of real estate research at NAR, said St. George has the most significant office employment growth in the nation, very strong population growth and in-migration, and above-average industrial demand, reflecting broader momentum rather than a single-sector spike.

02Which U.S. state ranks highest for future commercial real estate demand according to NAR?

South Carolina ranks highest among all U.S. states in future potential demand for commercial real estate, according to the National Association of Realtors index. The NAR index cited Spartanburg, South Carolina as one of the notable smaller markets within the state.

03How does the NAR commercial demand index compare current markets to pandemic-era performance?

The NAR index compares current market conditions 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 in 2022. Formerly strong markets such as Austin, Texas, Miami, and Naples, Florida have all declined markedly since 2022, according to the index.

04What smaller markets does NAR highlight as strong commercial real estate opportunities?

NAR principal economist Nadia Evangelou cited Fayetteville, Arkansas, Huntsville, Alabama, and Spartanburg, South Carolina as notable smaller markets. Evangelou said Fayetteville is seeing broad-based growth and Huntsville has one of the strongest multifamily scores in the nation. Evangelou said small and midsized markets could provide some of the best opportunities for investors.

05What data sources and economic factors does the NAR index use to measure commercial real estate demand?

The NAR index uses government data from the Bureau of Labor Statistics and the Census Bureau for population and migration. For office, it measures growth in professional and business services employment. Industrial tracks manufacturing, transportation and warehousing employment growth. Retail measures retail trade and leisure and hospitality employment growth. Multifamily incorporates population growth and net domestic and international migration.

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