“The anticipated interest in secondary markets is indicative of how the US real estate recovery is expanding beyond the traditional investment hubs,” said Urban Land Institute's chief executive officer Patrick L. Phillips last fall after the release of ULI's Emerging Trends in Real Estate, a joint publication based on interviews and surveys they did with over 1,000 professionals. “Access to greater amounts of both debt and equity financing, combined with a sustained improvement in the underlying economic fundamentals, means that the opportunities and returns offered in smaller markets are potentially very appealing.”

The Cincinnati recovery has continued in all property sectors, Cassidy Turley researchers found. During the second half of 2013, investors bought a total of 2.19-million-square-feet of office space for $184 million. Total sales volume for the year topped $221 million, the second straight year the Cincinnati region has seen over $200 million in office transactions. Furthermore, increased activity occurred in many different types of transactions and included value-add property sales to stable property sales. In addition, cap rates on sales have been trending downward.

According to Cassidy researchers, Cincinnati's industrial market also saw solid investment sales during the year. Investors bought 6.6-million-square-feet of space for $256.9 million, or about $39-per-square-foot. They attributed much of this to two huge industrial portfolio sales that, combined, brought $159.7 million into Cincinnati.

In August, Brookfield Property Partners purchased Industrial Developments International, Inc., a $1.1 billion sale that included, according to Real Capital Analytics, 2.72-million-square-feet of space in Cincinnati, worth about $93.15 million. And in October, Liberty Property Trust purchased a 23-million-square-foot industrial portfolio from Cabot Properties for $1.5 billion. The deal included 1.62-million-square-feet in Cincinnati worth $66.55 million.

“Cincinnati's retail market featured the strongest activity of any commercial real estate sector over the last 6 months with nearly $486 million in total sales volume,” the researchers note. A significant portion of the total came from the $97 million sale of Deerfield Towne Center, the $79 million sale of Sycamore Crossing Shopping Center and $45 million sale of the Tri-County Mall.

Multifamily properties also saw increased interest from investors in 2013, especially those buying properties worth more than $1 million, Cassidy Turley found. In the fourth quarter, 2,241 units were sold for a total transaction value of nearly $170 million, the highest in any quarter over the past three years. “According to REIS, asking rents jumped 3.11% from $740 to $763 per unit,” the researchers noted. “The asking rate increase is due, in part, to the development of new luxury apartment complexes throughout the region.”

However, Cassidy Turley report concludes “that outside of the multifamily market, leasing fundamentals are still lagging behind and investors should look toward a rebound in those instead of improvements in the capital markets to push prices higher.”