Just as the pandemic and resulting economic downturn had varying effects on commercial real estate fundamentals across the nation’s major markets, so the recovery has yielded different opportunity sets in different markets. However, Tampa looks like a poster child for Sunbelt cities faring best: out of 22 markets studied by Newmark for its “Newmark Opportunity Index” report, this Central Florida city is the only one to rank consistently among the top five for investment or sales opportunities across the major food groups, as well as for economic metrics.

Along with an overview of each sector, the report includes an index of each market’s performance across a variety of metrics. Among the high-level findings of the report, prepared by Newmark’s Alexander Paul and Bethany Schneider, are these:

• “While every market included in our index has experienced job recovery since the nadir of the economic downturn, pandemic-related public health restrictions have varied significantly by market, and some markets have recovered more swiftly than others,” write Paul and Schneider. The markets that ranked highest across the index’s economic metrics were Nashville, Tampa and Dallas.

• Nearly every U.S. office market is challenged by the uncertainty surrounding the increase in remote work brought on by the pandemic, but gateway cities have generally been impacted the most. The markets that ranked highest across the office metrics in the index were Tampa, Miami and Dallas. 

• Not surprisingly, the industrial market fared better than other property types during the pandemic. Accordingly, industrial sales volume accelerated in many markets in the wake of COVID-19, counter to the decline in sales volume for other property types. The markets that ranked highest across the industrial metrics in the index were Boston, Atlanta and Philadelphia.

• Nationally, multifamily occupancy ticked down to 95.5% in the first quarter from its cyclical high of 95.9% a year earlier, and effective rents declined 0.9% over the past 12 months. However, National Multifamily Housing Council data show that rent collections remained strong throughout the past year. The markets that ranked highest across the multifamily metrics in the index included Dallas, Phoenix and Atlanta.

• As of March, U.S. hotel occupancy had risen to 54.6%, an increase of nearly 1,600 basis points since the start of the pandemic a year prior. As in other property sectors, hotels in mid-size Sunbelt cities outperformed those in larger coastal and gateway markets during the pandemic. The markets that ranked highest across the hospitality metrics in the index included Atlanta, Phoenix and Tampa.

• Even prior to the pandemic, retail market fundamentals had been pressured for several years. “Perhaps intuitively, retail real estate has performed best in areas that had fewer pandemic-related restrictions on social distancing and gatherings,” write Paul and Schneider. “Generally, secondary and tertiary markets in the Sunbelt have outperformed larger markets during the past year. The markets that ranked highest across the retail metrics in the index were Nashville, Houston and Tampa.”