REAL ESTATE NEWS

A shift among the top-ranking real estate markets in the United States is now unmistakable, as Urban Land Institute and PwC’s newly-released Emerging Trends in Real Estate 2026 report points to significant geographic and sectoral recalibration among this year’s “Markets to Watch.”

Behind the headline rankings, a nuanced picture emerges: investor priorities are reshaping around demographic inflows, talent clusters and crucial supply-demand recalibrations.

Ten markets—Dallas/Fort Worth, Jersey City, Miami, Brooklyn, Houston, Nashville, Northern New Jersey, Tampa/St. Petersburg, Manhattan and Phoenix—lead the 2026 outlook, each for distinct reasons rooted in hard data rather than optimism or reputation alone.

Macro Forces Reshape Market Dynamics

Dallas/Fort Worth maintains its position as the top market, outpacing its rivals thanks to accessibility, robust sector diversification and deep employment growth. Known for its business-friendly climate and having attracted more than 100 corporate headquarters since 2018, Dallas is now solidifying itself as a national hub for finance and technology.

The metro’s under-construction pipeline of 2.7 million square feet is more than 60 percent preleased, with nearly 75 percent of new development located in the Uptown/Turtle Creek submarket. Despite an overall office vacancy rate of 27.6 percent, negative absorption is concentrated in Class B assets, while prime office space has just a 14.2 percent vacancy rate. A major push to convert underused offices is set to take six million square feet off the market, further tightening supply and bolstering long-term fundamentals.

Jersey City’s rapid ascent is underpinned by its location and a notable 7.5 percent population increase since 2020. The city’s 20 percent increase in apartment inventory over the past five years has left vacancy at only 2.8 percent, while average rents have doubled the national growth rate of 2.4 percent annually. Office leasing activity is strong, with financial services driving 63 percent of recent demand. The Hudson River waterfront presents average office rents at $44.51 per square foot—substantially higher than the rest of Northern New Jersey, but less than Manhattan—while vacancy rates, though elevated, continue to decline year-over-year.

Miami remains a magnet for corporate relocation, registering 127 new companies occupying 2.2 million square feet of office space since 2020 and boasting the nation’s lowest sublease availability rate. Prime Class A office rents soared by more than 50 percent in five years, now topping $73 per square foot, fueled by persistent demand from law, finance and international firms. Miami’s global connectivity is unmatched. It is a central node for Latin American trade, both at its airport and PortMiami, each playing a significant role in international finance and logistics.

Submarket Nuances and Supply Trends

Brooklyn is beginning to outperform as a standalone center, with its 2.7 percent multifamily vacancy rate dipping below the national average. Office vacancies across the borough’s 37 million square feet remain stable, but neighborhood-level performance shows sharp contrasts. Traditional hubs like Downtown Brooklyn have seen a surge in vacancy—now at 15.1 percent—driven by remote work, but areas like DUMBO, the Navy Yard and Williamsburg are stabilizing as creative and technology tenants seek proximity to talent. The residential rental market is particularly tight, driving same-store rent growth of 3.2 percent year-over-year, nearly triple the national pace.

Houston’s story is one of diversified growth, now surpassing 7.5 million residents and boasting a 7.9 percent increase in gross metropolitan product, now at $697 billion. Office demand has steadily shifted westward, with the Energy Corridor achieving a vacancy rate of 7.4 percent compared to a citywide figure of 24.3 percent. The gap between Class A and older office hangs at record levels: buildings delivered after 2015 have an average vacancy below 11 percent, while older stock sits above 30 percent. As one of the nation’s largest industrial regions, Houston’s logistics sector remains powered by the Port of Houston and a national lead in waterborne tonnage.

Nashville maintains its momentum, favored for both investment and development prospects, though housing costs and a downward movement among other regional peers moderated South Central’s overall outlook score. Industrial and retail assets are drawing net buy ratings, matching the investor enthusiasm in Dallas/Fort Worth. Job and income gains are projected to continue outpacing national averages, positioning the city as a Sun Belt mainstay.

Shifting Patterns and Investment Themes

Northern New Jersey distinguishes itself in multifamily, with net buy signals for apartments and a strong relative performance on affordability and vacancy. Investor appetite remains broad across property sectors and upward rank movement underscores the market’s attractiveness despite proximity-based competition with Manhattan and Jersey City.

Tampa/St. Petersburg reflects the broader Southeast region’s strong showing, with the city scoring among the top for both income and job growth rates through 2030. Apartment acquisitions are viewed more favorably than in high-growth South Florida metros, while the area benefits from national tourism leadership and core demographic inflows that continue to buffer market performance against headwinds.

Manhattan continues to draw capital interest, particularly in high-quality office assets where net buy sentiment has stabilized. The borough’s market, along with Brooklyn and Northern New Jersey, formed the epicenter of rising scores for the Northeast. This performance comes even as overall Gateway market advantages narrow and investors increasingly embrace granular, submarket-level underwriting.

Phoenix rounds out the ten, holding steady at tenth overall in real estate prospects. Retail remains the favored acquisition sector, reflecting robust population growth and expanding consumer demand. The city’s fundamentals are buoyed by its ongoing migration magnet effect— representing one of the few major Sun Belt metros whose net inflows have not materially abated since the 2021 migration wave. The commercial market is navigating near-term oversupply with a view toward sustained long-term absorption, supported by a strong job pipeline and above-average forecasted growth.

Source: GlobeSt/ALM