CHICAGO—Second-tier cities did not take the same roller-coaster ride of financial disaster and recovery endured by the rest of the country in the last few years, and that stability should give investors confidence in these out-of-the-way towns, according to Tadd M. Millar, the CEO of Indianapolis-based Milhaus Development. Millar was speaking at a morning session yesterday at the Urban Land Institute's Fall Meeting in Chicago.

“We don't have the huge highs or huge lows,” he explained. Even in the midst of the housing crash, he helped deliver about 200 condos to the market, and had very little trouble getting them sold. Millar later helped start Milhaus, which works primarily in other second-tier cities like Cincinnati, Louisville, Lexington, Oklahoma City, as well as Indianapolis. The company now has about 2,000 units under construction and Millar hopes to have started a total of 5,000 units by mid-2015.

“We're very narrowly focused on urban infill,” he added, since most second-tier cities have a host of older, underutilized buildings in downtown areas now considered desirable. For example, the company recently bought an aged, two-story concrete structure in downtown Indianapolis, and in 2012, began transforming it into Artistry, a five-story mixed-use development which will eventually have 502 apartments, 75,000-square-feet of commercial space, a third-floor pool and LEED certification.