Denver, Austin, and Fayetteville, Arkansas, rank as the top places to live, according to U.S. News & World Report’s Best Places to Live. The publication analyzed the 100 most populous metro areas, taking into consideration their job market, quality of life, home value and desirability by residents.
Let’s take a look at the top 10 and check in with the commercial real estate market in that area:
- Denver, Colorado – Topping U.S. News’ list is the Mile High City, thanks to a combination of a strong job market, proximity to outdoor experiences, and a thriving population – more than 20 percent of which is made up of millennials. JLL’s Denver Office Insight – Q42015 says that a surge of fast-growing technology startups are having a positive impact on the office market, where total vacancy hovers at 13 percent and yearly net absorption topped 2.1 million square feet. JLL notes that the state’s populace is skyrocketing with 101,000 new Colorado residents in the last 12 months.
- Austin, Texas – With 50 new residents daily, Austin is fast-growing. Thanks to no personal or corporate income tax, and a low state and local tax rate, the city is business-friendly, is considered the “Live Music Capital of the World,” and attracts a diverse culture. Real estate-wise, REOC Austin says the thriving job market yielded more than 2.4 million square feet of positive net absorption in office last year, tightening the vacancy rate to 8.3 percent. More than 1.5 million square feet of office is under construction.
- Fayetteville, Arkansas – Northwest Arkansas’ Fayetteville is transforming from small town to a center of higher education, culture, commerce and entrepreneurialism, says U.S. News. Employment, home prices and access to the Ozarks make this an ideal place to live and work. Loopnet says Fayetteville retail asking prices are up 3.96 percent year-over-year, and office rents are up 7.5 percent.
- Raleigh-Durham, North Carolina – Young, friendly, diverse, educated – these four adjectives define this corridor known for technology, medical and college rivalries. Local colleges are having a great impact on the market’s office outlook, says JLL Technology Outlook, which says that Raleigh-Durham is on the short list for tech companies looking to establish new operations. Graduates from NC State University are fueling tech employment’s growth.
- Colorado Springs, Colorado – Low unemployment, cost of living and abundant recreation and entertainment options make Colorado Springs desirable, and the CRE market is flourishing, too. Quantum Commercial Group Inc says the office market finished 2015 strong, with net absorption topping 200k square feet and vacancy dropping to 11.5 percent. Two office buildings delivered in Q4 2015, and steady, moderate growth is projected for this year.
- Boise, Idaho – U.S. News says downtown Boise is booming, as refugees from Africa and the Middle East are relocating to the region and shops, restaurants, arts and culture are following. Colliers Fourth Quarter 2015 Market Review says office activity and rents are steady, and industrial vacancy rates increased after a period of constriction. New businesses are poised and ready to enter the market, shrinking supply and increasing demand.
- Seattle, Washington – Seattle’s characteristically calm and relaxed population is drawn to the region for its liberal, outdoorsy – albeit expensive – way of life. The average salary in Seattle is higher than the national average, but not enough to keep up with the cost of living. A report by JLL says that, “Metro Seattle is experiencing a supply and demand issue. An estimated 25,000 job openings in the local tech industry have gone unfilled for more than six months, as the state struggles to train enough workers. As a result, Washington recruits more high-tech workers than any other state. Additionally, there is a lack of available large blocks of space, particularly in traditionally sought after creative submarkets.”
- Washington, D.C. – There’s more to the D.C.-metro region than government. The diverse population, ample job opportunities and young populace (fact: residents over the age of 60 comprise only 12 percent of the total population) keep the city flourishing. CBRE says that the D.C. office market posted positive net absorption for the fifth consecutive quarter at YE 2015, thanks to growth by nonprofits, technology and business services. Demand for the top segment of the market is robust, as tenants seek to upgrade to high-quality spaces in prime locations.
- San Francisco, California – Home to innovative entrepreneurs, students and retirees, San Francisco has long experienced a housing crunch and sky-high cost of living. Nonetheless, public transportation, a multicultural community and a burgeoning job market make the city one residents say they’ll never leave. JLL’s Q4 2015 San Francisco Office Insight report says sublease availability has gushed to 2 million square feet, thanks to major subleases from tech companies like Dropbox, Twitter and LinkedIn. Four major projects delivered in 2015, adding 1.2 million square feet to inventory. Average pricing for projects under construction is $79 per square foot – a 15 percent premium over the market’s current asking rate.
- San Jose, California – With 1 million residents, San Jose is the 10th largest city in the U.S., evolving from Spanish pueblo to technology hub. Manufacturing, science and tech industries lead employment in the area, fueled by Stanford and University of California, Berkeley. Colliers says Silicon Valley remains the nation’s strongest job market. During Q4 2015, 5.8 million square feet of new deals transacted across all property types, resulting into an occupancy gin of 1.6 million square feet.
Did your city make the list? Tell Market Share readers why it’s a hot spot for you and your company in the comments.
Kathryn Hamilton, CAE, is Vice President for Marketing and Communications at NAIOP Corporate.