Top-5 Markets for Commercial Real Estate Transactions in 2024
Terrydale Capital
Jan 31, 2024 5 Min read
Commercial real estate over the last couple of years has been a wild roller coaster for investors with market outlooks into 2024 leaning slightly more positive; however, with some reservations still in tow. Despite market turbulence, five major cities have emerged as the top contenders for commercial real estate investment activity for 2024 as reported by MSCI. These markets can be anticipated by investors to hold a large bulk of overall CRE investment activity and should be kept a keen eye on for potential investment opportunities.
Dallas
Dallas has emerged as the top market for commercial real estate investment allocation. This comes as no surprise as it has maintained this mantle for the last few years amidst rapid growth and expansion. At its current rate, it is expected to maintain its title as top dog for the foreseeable future. Despite having investment activity take a 58% drop from 2022, it still demonstrated $18.8 billion in commercial real estate sales in 2023. Of that, multifamily made up nearly half of those transactions.
Los Angeles
Despite dropping 47% in investment volume from 2022, Los Angeles performed $17.1 billion in transactions in 2023 to come in second. It maintained its status as second place from 2022 and above from third place in 2021. Of all commercial real estate transactions performed, multifamily and industrial rose to the top in terms of investment volume.
Manhattan
Manhattan demonstrated a significant recuperation in investment activity with jumping from number 6 in 2022 and number 9 the year prior. Despite a 47% decrease in volume compared to 2022, there was still $12.1 billion in transactions in 2023. The asset of note in Manhattan was office assets.
Chicago
Chicago came in at number 4, up from seventh place in 2021 and 2022. Nearly $11.9 billion in transactions were posted, which was down from 2022 by 62%. The assets that comprised the majority of transitions were multifamily and industrial assets.
Atlanta
Coming up in 5th place is Atlanta. However, it experienced a drop from third place in 2022 and second place in 2021. Atlanta posted $11.5 billion in transaction volume, which was a 62% decrease from 2022.
Other Market Developments
- San Antonio made its way onto the top 25 cities for transactions last year with $4.5 billion in transacted value. Of that amount, $800 million was encompassed by a single property transaction.
- Seattle was subject to the furthest drop in rankings with a 12-spot drop to the 20th spot. While usually a consistent member of the top-10, a 72% drop in market volume from 2022 spelled a new story.
- The other city that dropped furthest on the rankings was Orlando with an 8-spot drop from 14th place to 22nd due to a 76% drop in market volume. This was exacerbated primarily through the steep decline in multifamily volume.
In Conclusion
While the commercial real estate market took an unmistakable and very palpable hit in 2023, there are positive signs for the future. While the outset of 2024 will be marked by recuperation and a sluggish start, later quarters should begin to see an uptick in activity compared to 2023. The name of the game in this “interim” period will be preparation. At Terrydale Capital we have begun seeing the signs of a market “waking up” as we sit in the heart of Dallas committing ourselves to the heat of transaction volume across the nation. When you need a partner for your commercial real estate investing journey, contact us today!
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