Developers and lenders have kept US markets strong by exercising discipline when it comes to new construction, Clark adds. This discipline has been seen in all commercial real estate sectors, with the possible exception of apartments located within urban cores. The tempered approach to new supply should keep real estate values steady.

And niche sectors such as medical office buildings, student housing and self-storage are the most likely to sustain value over the long-term. All three, Clark points out, are likely to see high demand even if the economy plateaus or declines. “There is just not enough supply of these recession-resistant assets, so they will continue to do very well.”

EnTrust will soon offer up a roughly 500,000 square foot, class A office portfolio in Scottsdale, a suburb of Phoenix. Clark says it will be a good example of the things many investors are looking for these days. This town has the unbeatable combination of solid rent growth and robust absorption, along with a cautious approach to new development. And as its part of a secondary market, “the yield is going to be more compelling.”

CHICAGO—The economic recovery has reached a mature stage, and real estate markets across the US once ignored by investors now garner a lot of interest. And experts say this desire to buy in secondary markets, including value-add properties that involve more risk and higher yields, should last a considerable time, along with a generally healthy environment for real estate investment.

“The cost of living and the cost of doing business in the gateway markets is creating a demographic shift,” Jim Clark, managing principal of Chicago-based EnTrust Realty Advisors LLC, tells GlobeSt.com. For example, people and businesses have begun moving from expensive cities in California such as Los Angeles and San Francisco to cheaper metros nearby like Phoenix. The new demand will buoy these latter markets, push rental rates up, and draw in even more investors.

The increased focus on secondary markets “has been more pronounced in the last 24 to 36 months,” Clark adds. And he expects this state of affairs will last at least for a few more years, barring some unforeseen, “black swan” event that brings dramatic change to capital markets.

Foreign capital has been flowing into the US at a healthy clip, and Clark expects that to continue as well, although overseas investors tend to stick with the safer and better-known gateway markets. The coming of Trump may have unsettled some people, especially those that want to see the US maintain its existing trade agreements with other nations, but the big shocks promised during the campaign have not occurred. “And relative to other parts of the world, the US is still considered stable.”

Developers and lenders have kept US markets strong by exercising discipline when it comes to new construction, Clark adds. This discipline has been seen in all commercial real estate sectors, with the possible exception of apartments located within urban cores. The tempered approach to new supply should keep real estate values steady.

And niche sectors such as medical office buildings, student housing and self-storage are the most likely to sustain value over the long-term. All three, Clark points out, are likely to see high demand even if the economy plateaus or declines. “There is just not enough supply of these recession-resistant assets, so they will continue to do very well.”

EnTrust will soon offer up a roughly 500,000 square foot, class A office portfolio in Scottsdale, a suburb of Phoenix. Clark says it will be a good example of the things many investors are looking for these days. This town has the unbeatable combination of solid rent growth and robust absorption, along with a cautious approach to new development. And as its part of a secondary market, “the yield is going to be more compelling.”