6 Cheapest Places for Commercial Real Estate Investing

Reading Time: 4 minutes

The pandemic has profoundly affected real estate, and there are plenty of commercial markets that present fantastic opportunities for savvy investors. Some of these markets are underpriced and undervalued, while others look to be on the cusp of massive growth. 

These are some of the most promising urban markets for commercial real estate investing. 

Denver, Colorado

Denver is an up-and-coming commercial market with a vibrant business scene and a business-friendly state government. With a governor who founded a business accelerator before being elected to office, the local government encourages startups and is investor-friendly. 

Colorado has passed some of the most comprehensive laws for investments, making it one of the best states for investors to settle down and live off dividends. Investors can also utilize a 1031 exchange in Colorado to defer their capital gains taxes on selling an investment property. 

In the past five years, business applications in Denver exceeded the national average by 35% as startups flocked to Colorado’s capital, drawn by one of the most highly educated workforces in the country, a burgeoning cannabis industry, and billions in venture capital. According to CNBC, Denver is also the 16th best market in the US for small business loans. The city has plenty of business loan brokers to help entrepreneurs find the best lending companies and loan terms. 

It’s no surprise that job growth was 33% higher than the national average last year. Although it may not be the cheapest commercial market, it’s got one of the brightest futures of any city in the US.

Tampa, Florida

Tampa is a low-profile, business-oriented city in a highly pro-business state. It’s a great place to invest in commercial property. 

Tampa boasts a strong job market, with 5.6% growth in 2021 and affordable employees who earn an average salary of about $52,000. Tampa residents are very entrepreneurial, submitting 7,695 business applications per 100,000 residents. That exceeded the national average by about 30% over the last five years. 

Although many of those ventures will start as home-based businesses, the ones that scale will need offices and industrial space.

Tampa is one of the best cities for startups in the U.S with innovative business accelerator programs, such as the Embarc Collective, and local government initiatives to boost minority-owned businesses.

Tampa’s commercial real estate market has a bright future, and it’s cheaper than other Florida markets such as Miami.

Phoenix, Arizona

Phoenix has had one of the hottest residential real estate markets in the US over several years, but it also hosts an underrated commercial real estate market.

Thanks to local business accelerators such as the Arizona Founders Fund, Phoenix’s startup scene is exploding, and all those startups will need office space.

Local startups received more than $1.2 billion in venture capital from 2015 to 2020, while the average salary for Phoenix employees is $51,851 — nearly 20% lower than most major US cities. That means businesses can keep personnel costs down while they scale. 

The Phoenix job market is booming, too, with a growth rate of 5.6% for 2021.

Las Vegas, Nevada

Sin City is growing up, and it’s becoming a magnet for businesses of all kinds. Employment grew 8.5% over the past year — a rate that’s more than double the US average.

Many factors are drawing businesses to Las Vegas. It has one of the lowest corporate tax rates in the country at only 0.65% and a business-friendly regulatory environment. There’s also no personal income taxes in Vegas. 

Startups enjoy proximity to Silicon Valley and access a deep, well-educated, and affordable pool of employees. The average annual income in Las Vegas is just over $51,000 — nearly 20% lower than the national average.

With a flourishing tourism market and a rising tech scene, Las Vegas is one of the strongest commercial markets in the US.

Salt Lake City, Utah

Salt Lake City residents have filed more business applications per 100,000 residents than all but three US cities. That’s a testament to the entrepreneurial spirit of Utah’s capital city.

More than half of Salt Lake City residents over the age of 25 have a bachelor’s degree or higher, making it one of the most educated cities in the US. Brigham Young University – located just outside the city – has produced more than 300 businesses that have received $6.25 billion in funding. 

Utah is a business-friendly state with light regulations and low filing fees, which is sure to continue attracting rising business stars. 

Jacksonville, Florida

The second Florida city on this list is an under-the-radar business powerhouse. Although it lives in the shadow of more glamorous sister cities, Miami, Tampa, and Orlando, Jacksonville is Florida’s largest city, and it’s a great place to invest in commercial property.

Jacksonville combines excellent affordability — its cost of living is below the national average — with the state’s low corporate tax rate and no state income tax. Jacksonville might be the cheapest commercial market on this list, and it certainly has one of the highest ceilings. 

Headshot of blog author Ben Mizes

Author Bio

Ben Mizes is the Co-Founder and CEO at Clever Real Estate, the nation’s leading real estate education platform for home buyers, sellers, and investors.

Similar Articles

Share This Article