15 Markets Where Investors Should Still Bet on Offices

The office space segment of the commercial real estate (CRE) market was particularly hard hit by the pandemic and may be the slowest to recover, but recovery appears to be underway.

According to a report issued in mid-January by Jones Lang Lasalle (NYSE:JLL), net absorption in the U.S. office market turned positive in the fourth quarter of 2021. That marks the first time since the pandemic began that more square footage became occupied than was vacated during a quarter.

Here's a look at 15 markets that, according to JLL data, saw notable hikes in net absorption in Q4, making them a good place to consider getting involved in the early stages of a promising recovery.

Vacancy percentages and the amount of new construction underway (as a percentage of total inventory) also are included. The former speaks to space to be filled, while the latter indicates confidence on the part of developers and investors.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

The fast-growing Texas capital city saw a Q4 2021 net absorption of 801,658 square feet, according to the JLL report. Austin office space was still 16.4% vacant, while ongoing construction as a percentage of existing inventory was 7.3% -- among the highest in the country.

ALSO READ: Why You Should Buy an Investment Property in Austin

Beantown saw fourth-quarter net absorption of 1,294,075 square feet, JLL says. This market's strong presence in life sciences no doubt played a part. Vacancies were at 16.7%, while ongoing construction as a percentage of inventory was 3.6%.

The Queen City anchors North Carolina's largest market and saw net absorption of 217,225 square feet in Q4 and a vacancy rate of 19.5%. Ongoing construction as a percentage of inventory was 3.5%.

ALSO READ: How to Invest in Real Estate: A Complete Guide

The Big D recorded net absorption of 312,227 square feet in the last three months of the year, but vacancies remain at 25.5%, and ongoing construction as a percentage of inventory was 1.6%. (The JLL report listed Fort Worth separately and pegged its net absorption at 74,541 square feet, vacancies at 19.7%, and construction/existing space ratio at 0.7%.)

The capital of the Hawkeye State -- and its biggest market -- saw office space net absorption of 17,565 square feet in Q4, with vacancies at 16.0%, and ongoing construction as a percentage of inventory of 0.4%, according to the JLL report.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

The Bluegrass State's largest city saw net absorption of 22,911 square feet in Q4, with a vacancy rate of a relatively low 14.3% and ongoing construction as a percentage of inventory at only 0.2%.

ALSO READ: 3 Reasons Sam Zell Is Optimistic About Office Real Estate

Miami saw net absorption of 393,528 square feet in Q4, with a vacancy rate of 19.5% and ongoing construction as a percentage of inventory at 3.1%, according to JLL data.

Country music's capital city (and Tennessee's, too) saw net absorption of 630,051 square feet in Q4, with a vacancy rate of 18.3% and ongoing construction as a percentage of inventory at a relatively robust 5.0%.

The Big Apple saw Q4 net absorption of 1,757,599 square feet, a vacancy rate of 14.6%, and ongoing construction as a percentage of inventory of 4.5%. (Long Island, meanwhile, was at 262,937 square feet, 14.6% vacancy, and ongoing construction as a percentage of inventory at zero.)

Nearby Westchester County joins Long Island as one of only four of the 44 metro areas nationwide studied by JLL that showed too little new office construction to move that needle at all. The other two are Hampton Roads, Virginia, and North San Francisco Bay.

ALSO READ: Is Office Real Estate Still a Good Long-Term Investment?

The City of Brotherly Love saw net absorption of 253,667 square feet in Q4, according to JLL, while its office space remained 18.2% vacant, and ongoing construction as a percentage of inventory was at a minuscule 0.2%.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

The Tarheel State's capital city market saw net absorption of 104,028 square feet. A relatively low vacancy rate of 14.3% and a relatively high construction/inventory ratio of 4.5% reflect the presence of Research Triangle, state government, and major universities.

ALSO READ: Millennials Are Flocking to These 4 Cities

Real estate investors in this iconic city in the Lone Star State are benefiting from its proximity to the rapidly growing Austin region. San Antonio saw net absorption of 11,171 square feet in the fourth quarter, JLL says, while office vacancies were at 17.7% and ongoing construction as a percentage of inventory was at 3.4%.

Seattle saw net absorption of 2,020,638 square feet in Q4 -- the most on the JLL list, even though its total inventory is one-fifth that of New York's. Home to some of the world's largest tech companies, Seattle still posted a vacancy rate of 14.4%, while ongoing construction as a percentage of inventory was at a robust 5.1%.

ALSO READ: These Are the Most (and Least) Expensive Cities to Live In

Silicon Valley saw Q4 net absorption of 216,862 square feet and a vacancy rate of 14.4% as 2021 came to an end. Even though some major employers are moving their expansive headquarters elsewhere, it's probably too early to write this market off. JLL figures show ongoing construction as a percentage of inventory at 8.6% -- the highest among the 44 markets in the report.

Tampa, one of the fastest-growing residential markets in the United States, saw office space absorption of 364,671 square feet in Q4, the JLL report says, with a vacancy rate of 17.9% and ongoing construction as a percentage of inventory at a minuscule 0.5%.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

There are multiple ways for real estate investors to get involved in these markets and any others. That includes working with brokers and builders on individual buildings and projects, crowdfunding platforms, and real estate investment trusts (REITs). Now might be a very good time to get started.

Marc Rapport has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.