By: Amber Schiada, Vice President & Director of Research
What does Oakland and the East Bay have in common with Nashville, Raleigh Durham, Denver and Salt Lake City? Well, probably not country music. Or exceptional college basketball (although we do have the best NBA team in the country….Go Warriors!) The East Bay isn’t anywhere near being exactly one mile above sea-level. Nor was it founded by Mormon missionaries, although there is a very impressive LDS Temple in the Oakland Hills.
It is, in fact, one of five secondary markets identified as “up-and-coming” in terms of its commercial real estate sector.
JLL first called-out these five markets – known collectively, and affectionately — as the NERDS (Nashville-East Bay-Raleigh-Denver-Salt Lake City) in a report released in late 2014. Recently updated, JLL’s NERDS report notes how quickly these markets have advanced.
Since 2010, these five markets have seen their populations grow at a rate almost two and a half times that of the rest of the country. They also exceed the national averages in educational attainment and population growth. As those economic drivers have improved, these markets have also seen an uptick in commercial real estate demand. In 2015, NERDS reported occupancy growth of 7.9 million square feet—1.9 times faster than the US overall—while still offering close to a 25 percent discount on asking office rents. Not surprisingly, this has attracted the attention of real estate investors, especially a growing number of institutional players.
The report concludes that even though investor interest in these markets has increased dramatically, there is still a window of opportunity. Now is the time to check out the NERDS.
Read our full report here.