For the second year, the NAIOP Research Foundation has published the NAIOP Market Monitor, which evaluates office and industrial real estate markets using a two-dimensional analysis based on a metropolitan market’s size and its relative volatility – a departure from traditional commercial real estate market rankings.

Among the key findings this year:

• Office markets with commuter-reliant central business districts are still struggling to find their footing as they face low office utilization rates.
• Population migration continues to benefit industrial markets in the Sunbelt and Mountain West.
• Total transaction volume across the second-largest 51 office and industrial markets contracted less than transaction volume across the largest 51 markets for each product type since the first quarter of 2023 and since the same period in 2019. This likely reflects some combination of investors diversifying into smaller markets and a decline in activity among the investors who exclusively invest in the largest markets.
• Several industrial port markets, such as Savannah, Baltimore, Tampa and Seattle, are also attracting investment as supply chain managers seek to further diversify ports of entry to mitigate the effects of recent disruptions to major trade routes.
• Potential new notable intraregional trends include an apparent shift in transaction volume within California toward smaller, less dense office markets and a shift in the Northeast toward less dense industrial markets.
• The NAIOP Market Monitor examines data provided by CoStar to describe the relative size (transaction volume) and volatility (variance in transaction volume and capitalization rates) of the largest 102 office and industrial markets in the U.S.

An interactive map and dashboard that accompanies the report allows users to explore regional trends and evaluate how an individual market’s volatility and transaction volume have evolved over the last year and compare it to similarly sized markets.

“The NAIOP Market Monitor gives a more accurate picture of commercial real estate markets because of its two-dimensional approach, which better identifies risks and opportunities and reveals markets that may warrant further examination by developers and investors,” said Marc Selvitelli, president and CEO of NAIOP.