Philip Martin, vice president of research at Waterton, tells GlobeSt.com he has his eye on investments in markets that are in the path of sustainable metro and regional growth and close to the strongest primary markets. He points to Tacoma from Seattle, Boulder from Denver, Providence from Boston, Sacramento from San Francisco. “These 'spillover markets' allow us to build on the familiarity we already have with a particular city,” he says, “while pursuing opportunities in neighboring markets with similar supply and demand drivers, relatively attractive affordability and, in many cases, less competition.”

Despite the migration to secondary markets, heavy hitters are not turning their backs on the long-term promise of the core. According to LaSalle Investment Management, high quality, stabilized, long-leased assets are less sensitive than higher risk strategies to market volatility. With high occupancy and a small share of leases rolling over each year, the firm reports, income is more stable and liquidity is likely to hold up better in top tier locations.

“We are still playing in core markets and are constantly looking for new acquisitions in these cities,” Dmitry Gordeev, managing principal and founder of Fairbridge, tells GlobeSt.com. “At the present time, however, core market deals tend to be value-add or appreciation plays. In order to create a consistently high cash flow, we are currently acquiring more assets in secondary markets.”

Martin agrees. His recent acquisitions have targeted cities like Chicago and Los Angeles. The keyword at Waterton is diversity because a diversified portfolio helps the firm navigate various economic cycles.

“By thoughtfully allocating investment capital across a combination of primary and secondary markets throughout the US,” he says, “we've been able to build a high-quality, sustainable investment portfolio with cash flows that offer an attractive risk-reward profile.” And that's the ultimate motivator behind many companies that are expanding beyond core markets.

Find out why time may be on the sides of suburban markets in my recent column.

ATLANTA—Some areas have more characteristics than others suitable to secondary and tertiary development and investing than others. One key to success is understanding how to gauge the big picture.

Even in the big metro areas, the Urban Land Institute-PricewaterhouseCooper report reveals suburbs represent a major share of the existing jobs base. In the top 40 metro areas, the report indicates, 84% of all jobs are outside the core, giving investors optimism for a suburban future.

The report shows that in markets like San Antonio, Dallas, Houston, San Diego, Phoenix and Chicago, the suburbs are dominating the growth. Generally speaking, experts agree that 18-hour cities like Portland, Denver, Atlanta, Seattle and Charlotte, NC are also strong bets.

In addition to expanding in the markets where it already has a presence, including Indianapolis, Nashville and southeast Wisconsin, Bob Smietana, HSA Commercial's vice chairman and CEO, tells GlobeSt.com his firm is exploring opportunities in similar secondary markets throughout the Midwest that share critical attributes such as a strategically valuable location for logistics and access to a skilled labor pool.

Philip Martin, vice president of research at Waterton, tells GlobeSt.com he has his eye on investments in markets that are in the path of sustainable metro and regional growth and close to the strongest primary markets. He points to Tacoma from Seattle, Boulder from Denver, Providence from Boston, Sacramento from San Francisco. “These 'spillover markets' allow us to build on the familiarity we already have with a particular city,” he says, “while pursuing opportunities in neighboring markets with similar supply and demand drivers, relatively attractive affordability and, in many cases, less competition.”

Despite the migration to secondary markets, heavy hitters are not turning their backs on the long-term promise of the core. According to LaSalle Investment Management, high quality, stabilized, long-leased assets are less sensitive than higher risk strategies to market volatility. With high occupancy and a small share of leases rolling over each year, the firm reports, income is more stable and liquidity is likely to hold up better in top tier locations.

“We are still playing in core markets and are constantly looking for new acquisitions in these cities,” Dmitry Gordeev, managing principal and founder of Fairbridge, tells GlobeSt.com. “At the present time, however, core market deals tend to be value-add or appreciation plays. In order to create a consistently high cash flow, we are currently acquiring more assets in secondary markets.”

Martin agrees. His recent acquisitions have targeted cities like Chicago and Los Angeles. The keyword at Waterton is diversity because a diversified portfolio helps the firm navigate various economic cycles.

“By thoughtfully allocating investment capital across a combination of primary and secondary markets throughout the US,” he says, “we've been able to build a high-quality, sustainable investment portfolio with cash flows that offer an attractive risk-reward profile.” And that's the ultimate motivator behind many companies that are expanding beyond core markets.

Find out why time may be on the sides of suburban markets in my recent column.