State-By-State Rankings: Top-Down Investment Analysis

Overview of the Top-Down Investment Study

Thoughtful commercial real estate investing requires an approach that considers both a top-down perspective of important economic drivers in a subject property’s broader geographic area, as well as a traditional bottom-up due diligence process factoring a subject property’s rent roll, income and expense information, leasing and sale comps, and supply/demand data within the relevant submarket.

Our methodology for analyzing the investment potential of states is weighted toward determining areas where employees want to live and companies want to move and grow. It is within our cities reports and county-by-county methodology that we dive deep into local commercial real estate fundamentals.

To determine the states most suited to near-term investment, we conducted the following top-down study applying 50 distinct measurements to all 50 states and the District of Columbia. We assemble our analysis using a total of 50 factors condensed into these six key categories:

• Commercial Real Estate Fundamentals
• Population Statistics
• Employment Statistics
• Financial Considerations
• Quality of Life
• Demographics and Education

As we like to say, commercial real estate houses the economy. Unless burdened by a prior oversupply of new product, areas with increasing population and jobs should produce additions to occupied space. Higher occupancies lead to greater rental rates, which can produce more net operating income, and lead to higher property values. Conversely, areas experiencing slow or negative growth in population and jobs could be expected to lose ground in achieving gains of property income and value. For many key population and employment statistics, we factored in both the absolute size of the state (the more people and the more jobs in a state, the better), and we also weighted the rate of increase on a percentage basis (to reward states experiencing faster relative growth).

Read the full report for more information on:

• Gross Population Outflows
• Net Migration (inflows minus outflows)
• CRE Rankings
• Population Rankings
• Employment Rankings
• Financial Rankings
• Quality of Life Rankings
• Demographic Rankings
• Overall Rankings

© Northmarq Fund Management Research, February 2025. All Rights Reserved. Copying, selling or otherwise distributing copies and/or creating derivative works for commercial purposes is strictly prohibited. Although significant efforts have been used in preparing this guide, Northmarq and Northmarq Fund Management make no representation or warranties with respect to the accuracy and completeness of the contents. Northmarq and Northmarq Fund Management Research do not provide tax, legal, investment or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for, tax, legal, investment or accounting advice. You should consult your own tax, legal, investment and accounting advisors before engaging in any transaction.