Online real estate marketplace Auction.com has released its rankings of the office sector's top buy and sell markets based on current and expected fundamentals, including projected net operating income, vacancy and rental rates, and forecasted economic strength.
According to the list, San Jose, Calif.; San Francisco; Seattle; Orange County, Calif.; and New York were recommended as the top buy markets, with each displaying strong demographics, at least one booming business sector and a growth in payroll.
Pittsburgh; Fort Worth, Texas; Houston; Memphis, Tenn.; and Cincinnati were listed as the most recommended sell markets based on factors specific to each, including dependence on the energy sector, weak employment growth or lethargic demographics.
‘Investors will find sustained rent growth and strong occupancy on the West Coast and in tech-driven markets that we predict will enjoy continued success. Other markets, meanwhile, face an abundance in supply that is overwhelming demand and weighing on rent, and this could persist,’ says Auction.com's chief economist Peter Muoio.
Auction.com's report notes that the most strength is seen in markets encouraged by the technology surge, including the West Coast, New York City and Boston.
‘The economic health of a region – its ability to create good-paying, full-time jobs – is what really drives the underlying fundamentals and determines whether a market should be in buy or sell territory,’ says Rick Sharga, Auction.com's executive vice president.