Yield-Hungry Investors Scoping Secondary Markets
Bloomberg reports: As commercial property buyers “gradually embrace risk” and look beyond primary, competitive markets for higher yield, they are finding opportunities in the US's leading secondary markets. In a story recently run on Bloomberg, it was determined through a variety of data sources that investors have turned to markets such as Dallas, Denver, and Minneapolis during the first part of 2011 as the cutthroat markets of New York City and Washington become untenable for some investment classes.
The article quotes data aggregated by Real Capital Analytics to state that yields in secondary markets have become relatively attractive over the past year as competition pushed cap rates down on the nation’s coastal markets: “Office-property cap rates were 7.8 percent in Dallas, 8.2 percent in Minneapolis and 8.4 percent in Denver as of March.”
Intuitively, the article pointed out that investors who cannot afford New York or Washington, DC are hunting for cities where job and population growth suggest property acquisitions are a smart investment. Each of Dallas, Denver, and Minneapolis display positive growth on both metrics, while cities such as Seattle and Boston show even more promise and are attracting competition as well.
For more information on this developing investment trend, please see the full article on Bloomberg.
View the full article on Bloomberg: Yield-Hungry Investors Scoping Secondary Markets
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Posted by: Nina Turner