Secondary and Tertiary Markets Attracting Capital More Than Ever Before
Increased Capital Allocations to Private Real Estate
Both institutional investors and private wealth managers continue to increase allocations to this asset class
The increase of capital results in more competition for deals, causing investors to seek alpha in new geographies, property types, and strategies
Less Sophisticated Sellers & Operators
Assets are typically owned by individuals or families and are generally not actively managed
This results in properties that are in need of neglected updates and inplace rents below current market rates
Large Untapped Market
Secondary & tertiary markets represents trillions of dollars in potential deal flow
Less competition for deals, resulting in more stable pricing and increased deal flow
Ability to achieve opportunistic returns with value add risk profile
Migration to Smaller Cities
Technological advances allows workers more flexibility to work part/full time remote with a focus on affordability and quality of life
Increased focus on affordability and quality of life
Outsized Opportunity
85 Markets
Number of secondary and tertiary MSAs in the Western United States
60 Million
Population of secondary and tertiary MSAs in the Western United States
$1.6 Trillion
Value of multifamily and industrial in these MSAs
Following a Similar Path of Other Niche Strategies
Secondary & Tertiary markets are extremely fragmented and are characterized by smaller average asset sizes and non-institutional owners.
Property types such as self-storage, mobile home parks, and single family rentals where once thought of in a similar way but have since been institutionalized and attract even the most professional capital.
Secondary & tertiary markets are at the beginning stage of becoming mainstream. Institutional investors will seek exposure to this segment of the market in order to access increased returns and gain further diversification.
Self Storage
Mobile Home Parks
Single Family Rentals
