News release

Investors set sights on rising star cities in the Sun Belt and Mountain West

March 25, 2021

While gateway cities will always remain attractive, residents and investment shift towards Sun Belt markets

CHICAGO – Mar. 25, 2021 – Gateway cities have and always will be attractive from both a resident and investor standpoint. However, the pandemic has accelerated migration trends to a handful of rising star cities and as a result, investors are following suit.

Growth markets such as Atlanta, Austin, Charlotte, Dallas, Denver, Miami, Nashville and Raleigh have witnessed 10-year population growth between 10-30%, outpacing the 2010-2020 U.S. population growth of 7.1%. Residents are drawn to a lower cost of living, a lower average commute time and amenities that are now rivaling gateway markets.

As a result of this growth and macro trends, the job recovery has been nearly twice as fast in these markets and we are seeing industry clusters develop in the tech, life sciences, media, professional services and finance/insurance sectors.

“Companies are partially drawn to these growth markets for savings, given these markets boast an average cost of doing business index score of 94 compared to 127 in gateway markets, which is driven largely by corporate taxes being 65% lower on average,” Lauro Ferroni, Senior Director, JLL Research stated. “In addition, many of these cities are home to large universities that continuously supply a source of skilled talent.”

Leading economic and demographic performance maintain strong trajectory of non-coastal western marketings, Texas and the Southeast

How does this all translate for an investor? Growth markets report significantly greater rent and occupancy growth, boasting an average five-year rent growth of 37.6% across the eight cities, versus a 17.8% U.S. five-year rent growth. In terms of net absorption, the growth markets have seen on average 6% net absorption over the last five years in comparison to the U.S. five-year net absorption rate of 2.1%.

Domestic institutional investment is on the rise in the growth cities. As an example, Charlotte has seen an almost 300% increase in institutional investment and a 200% increase in foreign investment since 2016. Foreign investors have increased investment volume in Atlanta, Austin, Dallas, Charlotte, Miami and Raleigh 100-200% in the last four years. Top-end pricing is now routinely surpassing $500 per square foot in these geographies and approaching $900 per square foot in Austin, which has benefitted from numerous corporate relocations in the past year.

As we look ahead, we anticipate the line between gateway and growth markets to blur. Gateway markets such as New York City and San Francisco will always attract and retain both residents and companies however the “new gateway” cities will be more in favor from both classes on a go-forward basis.   

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.

For more news, videos and research resources on JLL, please visit our newsroom.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion, operations in over 80 countries and a global workforce of more than 91,000 as of December 31, 2020. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit