Key Takeaways: The National Association of REALTORS® released its third-quarter 2026 Commercial Real Estate Demand Index on November 4, 2026, covering 306 metropolitan areas, and 143 of them scored above 100, the average metro. San Antonio climbed from 76th to 9th in one year, the largest increase of any market, Seattle rose from 146th to 44th, and Nashville advanced from 73rd to 20th. St. George, Utah, kept the top spot with a score of 132. NAR says industrial employment growth in manufacturing, transportation and warehousing drove the biggest moves, even though industrial employment was relatively flat nationally.
Here is the fresh insight most readers will miss. This index does not rank today’s rents or vacancy rates. It ranks the job growth underneath them, which means it can point to demand before that demand shows up in a rent roll.
Industrial Hiring Moved the Rankings, Not Headlines
NAR said stronger job growth in manufacturing, transportation and warehousing helped propel select markets higher, notably San Antonio, Seattle and Nashville. Austin also entered the top 10, and NAR’s own write-up adds that Austin reached its highest ranking since Q3 2023.
Nadia Evangelou, principal economist and director of real estate research at NAR, said: “The story this quarter is where companies are hiring.”
She added: “While industrial employment has been relatively flat nationally, some markets are adding jobs much faster than others. San Antonio is a good example, moving from 76th to 9th in just one year. These differences in local employment growth are reshaping which markets show the strongest commercial real estate demand signals.”
| Market | Q3 2026 result | Change |
|---|---|---|
| St. George, Utah | Score 132, ranked 1st | Retained the top spot |
| Huntsville, Alabama | Score 125 | Ranked 2nd |
| Fayetteville-Springdale-Rogers, Arkansas | Score 123 | Ranked 3rd (tied) |
| Sherman-Denison, Texas | Score 123 | Ranked 3rd (tied) |
| Ocala, Florida | Score 121 | Ranked 5th |
| San Antonio, Texas | Ranked 9th | Up from 76th, the largest increase |
| Nashville, Tennessee | Ranked 20th | Up from 73rd |
| Seattle, Washington | Ranked 44th | Up from 146th |
The rest of the sector picture was mixed. Leisure and hospitality employment increased in approximately two-thirds of metros, while retail trade employment lagged.
That split matters next to the residential data investors already watch. Home prices rose in 78% of metro areas in the third quarter, yet price growth alone does not tell you where employers are adding the workers who rent homes and lease warehouse space.
How to Read a Score of 100, and Why Below Average Is Not the Same as Shrinking
The index compares metropolitan areas with one another each quarter, and a score of 100 represents the average metro. Scores above 100 indicate stronger demand drivers relative to other markets, and scores below 100 indicate weaker relative momentum.
- 306 metros tracked: 143 scored above 100 in the third quarter, so fewer than half beat the average.
- Big names lagged: Miami, New York, Los Angeles and San Francisco continued to score below average.
- One coastal mover: San Francisco improved approximately five points year over year, even while staying below average.
- A common misread: a score below 100 does not necessarily mean a market is shrinking, because the score measures relative momentum, not decline.
Evangelou made that distinction directly: “Two markets can have similar vacancy rates and rent growth, but very different underlying demand.”
She added: “Looking at where jobs are growing helps us understand where commercial real estate demand may be heading.”
The index is updated quarterly and includes historical data dating back to 2022, so a beginner can track whether a market’s jump holds for a second quarter instead of chasing a single headline. You can read the rankings, sector scores and methodology on NAR’s Commercial Real Estate Demand Index page.
That patience also fits the wider market. Rent growth only just turned positive for the first time in over three years, and homes under contract fell 10.5% year over year in October, so job growth is one of the few forward signals moving in a clear direction right now.
What Beginner Investors Should Do With This Ranking
- Follow the hiring, not just the listing. Before you buy near a warehouse district, check whether local manufacturing, transportation and warehousing employers are adding jobs. NAR’s biggest climbers, San Antonio, Seattle and Nashville, moved because of that hiring, not because of a price spike.
- Use the score the right way. Treat a score above 100 as stronger relative momentum and a score below 100 as weaker relative momentum. Never read below 100 as proof a market is shrinking, because NAR says it does not mean that.
- Compare two markets with the same vacancy story. Evangelou’s point is practical: when two areas show similar vacancy rates and rent growth, pick apart their job growth next. The market adding industrial jobs has the stronger underlying demand signal.
- Watch retail-heavy bets more closely. Retail trade employment lagged in this release while leisure and hospitality rose in about two-thirds of metros. If a deal depends on retail tenants, ask harder questions about the local hiring behind those storefronts.
- Wait for a second quarter before you chase a climber. The index updates quarterly with history back to 2022. A market that jumps once and holds its ranking is a stronger lead than a one-quarter spike.
The bottom line: commercial demand is being decided locally, by which metros are adding industrial jobs. San Antonio’s climb from 76th to 9th is the clearest example, and the method behind it, tracking hiring before it hits rents, is a tool a beginner can use in any market.
Data: National Association of REALTORS®, third-quarter 2026 Commercial Real Estate Demand Index, released November 4, 2026.
