Respondents predicted that average office rents would grow in gateway areas like San Francisco (5.75%), New York (5.21%), the Pacific Northwest (4.17%), Los Angeles (2.3%) and Northern Virginia (1.67%) in 2012. At the same time, some investors are hesitant about government-dependent cities, such as Washington, DC, where municipal, state and federal job cuts are occurring.

“The more you get away from a core market, the more local the drivers are,” Roschelle says. “Core markets have proven that they have a diverse enough employment base and a greater propensity to create jobs. When you get into smaller markets, they tend to be more dependent upon one large employer or one large industry.”

On a nationwide basis, the survey indicated that office markets with a strong technology, education or energy sector are driving investor interest. Roschelle says secondary markets like Austin, TX; Raleigh-Durham, NC; Charlotte, NC; San Jose, CA; Phoenix, AZ; and Salt Lake City, UT have “a lot of traction to them” based upon employment growth in emerging fields.

“Those are secondary markets that have a diverse enough employment base and a component of technology in that employment base that has investors optimistic that there will be job growth in that market,” he says.

The survey also found the average overall capitalization rate decreased in 22 of the 31 surveyed markets across the county, a sign that cap rates are continuing to compress in core markets. As a result, investors are turning to secondary markets to enhance yields—but having local market knowledge is key.

“What was surprising to me about this survey result was considering the slowness of job growth in our country, I would have thought that the office sector would remain challenged,” Roschelle says. “The fact that we are seeing real rent growth expected for 2012, it is encouraging to be that we will see better news for the office sector as a whole.”