Search
 

The Shift From Urban Core to Tertiary Markets

ORLANDO—How have commercial real estate investor appetites shifted in the past year? What drove the shift and what can we expect in 2016? GlobeSt.com…

By Jennifer LeClaire | jenniferleclaire | | Updated on January 28, 2016
“Class A caps were driven down to 3% to 6% in most markets..." Kurt Westfield
ORLANDO—How have commercial real estate investor appetites shifted in the past year? What drove the shift and what can we expect in 2016? GlobeSt.com caught up with Kurt Westfield , managing director of WC Companies , to get some answers. He told us he’s seen a shift from class A to class B and from urban core to tertiary markets as inventory has been absorbed. “Investors are still able to procure strong opportunities with effective caps in outside markets and this is a major shift from 12 to 24 months ago where major markets and top-class assets were readily available with strong leverage,” Westfield says. He noted that absorption is one of the factors driving the shift, along with increased lending capacity coupled with new construction. “Class A caps were driven down to 3% to 6% in most markets leaving investors seeking stronger returns in outlying markets where there had previously been less competition,” Westfield says. As for 2016, he expects just as much investment if not more. “Major economic drivers have maintained a strong presence from leveraged and financed investors and cash sales still make up an above-average chunk of the investment-class assets being purchased,” Westfield says. “Property values have risen, dramatically in our local market, amongst most major metro regions nationwide and rental rates continue to rise, promoting strong investment opportunities across the board in the multifamily sector .”

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.