Search
 

What is a Secondary Market?

You know we are in the mature part of the cycle when institutional investors start hashing over just what is a secondary market. What they are really concerned about and trying to rationalize is buying assets in higher risk markets with suspect tenant depth and limited exit strategies if times go bad. And oh by the way that's just about everywhere outside the leading 24-hour cities. It's just a matter of degree of how risky…

By Jonathan D. Miller | Updated on January 19, 2015

You know we are in the mature part of the cycle when institutional investors start hashing over just what is a secondary market. What they are really concerned about and trying to rationalize is buying assets in higher risk urban centers with suspect tenant depth and limited exit strategies when times go bad. And oh, by the way, that’s just about everywhere outside the leading 24-hour cities. It’s just a matter of degree of how risky some of these other places are.

Most savvy domestic investors realize that buyers are now significantly overpaying in the handful of primary gateway markets. They have stepped aside and let the foreigners do the deals. It’s a bit like the trophy hunting by Japanese in the late 1980s. Just this time various Chinese, South American, and Middle East investors are doing the hold-no-bars acquiring. What did the Waldorf sell for?  $2 billion.  And the penthouse at One 57, overlooking Central Park and everything else? $100 million plus. The stratospheric pied de terre on the top French Fry building at 432 Park will likely garner at least as much–is anybody going to dare to live in it anyway? 

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.