Foundational shifts in capital costs and operating fundamentals are reshaping where investors can find real estate returns over the next decade and CBRE’s latest 10‑year forecast suggests those returns will be distributed far less evenly across U.S. markets than in the last cycle. The firm’s analysis, built around capex‑adjusted income yields and projected NOI growth, shows a market split between income‑rich secondary metros and a smaller set of locations that still combine elevated cash flow with durable growth, particularly select coastal office hubs and Midwest multifamily and industrial nodes.
Investment Framework: Yield And Growth
CBRE’s framework evaluates 277 U.S. markets by pairing two familiar lenses: the median income yield investors can expect after accounting for capex and annualized NOI growth CBRE forecasts over a 10‑year horizon. The NOI projections are grounded in expectations for vacancy or availability trends and asking rent growth, with 70% of the weight placed on the first five years, when visibility on leasing, supply pipelines and tenant demand is highest. By treating the weighted national average as a reference point, CBRE effectively groups markets into four broad profiles: high‑yield with lower growth, high‑yield with higher growth, low‑yield with higher growth, and, in a small number of cases, low‑yield with low growth.
Yield‑Heavy, Growth‑Light Markets
One large group of markets falls into the high‑yield, low‑growth camp, a profile that is especially common among smaller secondary and tertiary metros. These are locations where institutional capital is less prevalent.
Hartford retail is one cited example— where pricing must offer extra income to attract mainly regional investors, even though long‑term NOI growth prospects are modest. CBRE notes that more than 80% of office markets currently sit in this category, reflecting an environment of elevated vacancy, slower net absorption and higher re‑tenanting costs that have pushed yields up without a corresponding acceleration in growth. For investors, these markets lend themselves to strategies that prioritize stable cash flow and careful capital planning over aggressive assumptions about rent appreciation or exit pricing.
Where Yield And Growth Align
The most coveted lane in CBRE’s taxonomy is the smaller group of markets that combine above‑average yields with stronger‑than‑average NOI growth, creating a rare alignment of income and appreciation potential.
San Francisco, Seattle and Dallas office appear here, an atypical position for coastal and tech‑oriented office hubs that, in previous cycles, would more likely have exhibited strong growth but correspondingly low yields. CBRE attributes its current status to a repricing driven by cyclical weakness, remote and hybrid work, sublease space and tech layoffs—layered on top of longer‑term strengths such as diversified corporate bases, innovation economies and constrained, high‑barrier supply.
Midwestern Multifamily And Industrial Plays
A similar pattern emerges in several Midwestern multifamily and industrial markets, including Detroit, Columbus, Cincinnati and Dayton, which CBRE highlights as combining relatively high capex‑adjusted income yields with solid growth trajectories. These metros largely avoided the construction boom of recent years, leaving them with tighter supply, less competition from new deliveries and the ability to push rents at a pace that outperforms national averages.
In industrial, onshoring and regional manufacturing investments add further support to demand; in multifamily, comparatively affordable housing costs and stable local employment undergird occupancy. For investors prepared to underwrite smaller deal sizes and regional economic risk, CBRE suggests these Midwestern nodes may offer some of the clearest opportunities for double‑barreled 10‑year returns.
High‑Growth, Thin‑Yield Sun Belt Hubs
On the growth‑oriented side of the spectrum, many of the markets that have dominated capital flows in recent years—major Sun Belt metros and supply‑constrained coastal multifamily hubs—screen as lower‑yield but higher‑growth. CBRE’s forecast shows strong NOI growth in these locations, driven by continued in‑migration, favorable demographics, and, in some cases, persistent supply constraints, but income yields that sit below the national median. In practical terms, much of the anticipated upside appears already embedded in pricing, leaving investors more reliant on sustained rent gains and, potentially, future cap‑rate compression to achieve return targets.
Manhattan’s Singular Office Profile
Manhattan stands out as the only office market CBRE places in this high‑growth, low‑yield bucket.
Even with hybrid work reshaping occupancy patterns, New York’s depth of tenant demand, global capital appeal and long‑standing constraints on new office supply continue to support an outlook of stronger‑than‑average NOI growth, but at yields that remain comparatively thin. For core and core‑plus investors, Manhattan and the broader set of lower‑yield, higher‑growth markets may still justify premium pricing, but the margin for error is narrower and performance will hinge on sustained operational outperformance rather than a simple cap‑rate trade.
Low‑Growth, Low‑Yield Outliers
The most challenging profile in CBRE’s grid is the relatively small set of markets that combine low growth with low yield. Where such markets appear, they are often port‑driven logistics locations that have seen their prospects dim amid weaker global trade volumes and evolving supply‑chain patterns, while asset prices have yet to reflect the shift fully. In these cases, CBRE’s view implies that investors are not being adequately compensated for either trade‑related risk or weaker NOI growth, making them hard to justify in a long‑horizon allocation absent a particular conviction about a rebound in trade or a transformative repositioning strategy.
Portfolio Construction Over The Next Decade
Taken together, CBRE’s 277‑market analysis underscores that the next decade in U.S. commercial real estate is unlikely to be defined by broad‑based cap‑rate compression or a uniform rebound in fundamentals.
Instead, investors face a landscape where some smaller and secondary markets can still function as yield engines with limited growth, a handful of coastal and Midwestern markets offer both attractive income and credible growth trajectories and many marquee Sun Belt and coastal multifamily markets require a higher tolerance for thin going‑in yields in exchange for projected rent‑driven appreciation.
For investors structuring 10‑year business plans, CBRE’s work suggests the central question is no longer simply which sectors or regions to favor, but how to balance exposure across these distinct income‑and‑growth profiles to match portfolio risk, leverage and return objectives.
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