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10 Most Expensive States for Commercial Real Estate in the US

Published: 05-03-22 Category: Investing

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As you look for new commercial real estate assets to add to your portfolio, cost plays a major role.

We compiled this list of the 10 most expensive states to buy commercial real estate in. If you’re looking for affordable deals, it’s probably best to avoid these states.

Cost Calculation Methodology

Our commercial real estate listing data shows that the cost of commercial real estate varies based on location within a state.

In our assessment, we considered which states had the largest number of the most expensive submarkets and then ranked those states by the most expensive’s submarket in the state’s cost per square foot.

This means that while it is very expensive to purchase commercial real estate in Chicago, the state of Illinois did not make the list because of the cost of commercial real estate throughout the rest of the state is fairly affordable.

#10 – Virginia

There are many areas of Virginia that are considered to be in the Washington D.C. metro area. With many government buildings and agencies in Virginia, such as the FBI in Quantico, the cost of commercial real estate in the area, if you can find it, is quite high.

For instance, in Alexandria, Virginia, you can expect to pay $342.39 per square foot. However, in rural areas outside of big cities, you would pay much less.

#9 – Texas

Texas has been growing in popularity over the past few decades, as the big cities of Houston, Austin, and San Antonio have revitalized downtown areas and gained stronger reputations as commercial hubs.

Inside these cities, it’s very expensive to buy commercial real estate. In Houston’s Central Business District, you could expect to pay $364.50 per square foot.

However, considering the ongoing growth potential of these markets, getting commercial real estate at this price point might be considered a steal in the future.

#8 – Florida

In terms of commercial real estate, Florida offers both affordable and expensive options. In Miami, Florida’s Coral Gables, you can expect to pay $367.14 per square foot.

Areas like Orlando, Tampa Bay, West Palm Beach, and Jacksonville are also expensive and the available land available for new commercial real estate development is extremely limited.

However, areas like Lakeland, Sarasota, and Naples have more affordable price points for commercial real estate in Florida.

#7 – North Carolina

The cities in North Carolina tend to be more expensive than the rural areas. If the city is home to a university, the costs are much higher for commercial real estate.

In Charlotte, North Carolina, you could expect to pay $373.68 per square foot.

Charlotte is a wonderful small city that’s great for businesses. Selecting to buy commercial real estate here is practical, even if it’s expensive.

#6 – Oregon

It is generally quite expensive to live in Oregon. It’s also expensive to buy commercial real estate here. In Portland’s Goose Hollow District, you can expect to pay $406.04 per square foot.

The prices are very dependent on the neighborhood, however, and you can find some more affordable options by opting to buy property in less desirable or populated areas.

#5 – Washington D.C.

Washington D.C. is one of the most expensive places to live and operate a business in the United States. With easy access to serve the federal government and no land left to build new properties, it is understandably expensive.

In Washington D.C., you could expect to pay $581.58 per square foot. This is considerably higher than most of the other commercial real estate prices across the country.

#4 – Washington

The state of Washington is expensive, particularly in Seattle, Olympia, and Puget Sound.

In Seattle’s Lake Union, you could expect to pay $866.61 per square foot. This is more than double the cost per square foot of other cities on this most expensive states list.

#3 – Massachusetts

Massachusetts has some of the most expensive metro areas in the United States, including Cambridge, Boston, and Brookline. It’s the home state for many prestigious ivy league universities, including Harvard University.

In Boston, Massachusetts, you could expect to pay $1,074.14 per square foot. However, costs could be much higher than this depending on how close you buy commercial real estate to historic areas and schools.

#2 – New York

New York is one of the most expensive states to live in or to buy commercial real estate. There are so many areas that are very expensive, including New York City, Long Island, and the Hamptons.

However, New York City remains the most expensive place to find and buy commercial real estate. In the Plaza District of Manhattan, New York, you could expect to pay $1,260.93 per square foot.

It can be difficult to acquire real estate, as well as to find business tenants successful enough to pay the high rent prices.

#1 – California

California is almost synonymous with being extremely expensive, whether in Los Angeles, San Francisco, or San Diego. While there are some less expensive places to live, so many of the country’s most expensive real estate markets are located in California.

In Mountain View, California, you could expect to pay $1,554.16 per square foot. However, it isn’t much less expensive in other urban areas in the state.

Despite Costs, Hidden Gems Still Exist

The most expensive state to live in is not surprising, as California has the most expensive commercial real estate in the United States.

However, other states that may surprise you include Virginia and Texas. Commercial real estate in these states can cost double the national average. If you do find a good deal, it’s could be smart to invest.

While there are many options for affordable commercial real estate, most of them are located outside of major metropolitan cities like Washington D.C., Boston, and New York.

The least expensive states to buy commercial real estate are mostly located in the Midwest and South.