SAN DIEGO—The main reason buyers are venturing outside their backyard to invest is yield, since investors are accustomed to a certain pricing level and yield expectations, Marcus & Millichap's Nick Totah tells GlobeSt.com. Totah is associate director of the Totah Group, a national office and industrial-properties group with M&M, and he says markets like Arizona, Texas and Colorado can offer the yield investors here are seeking.

In addition, Totah says he has been selling a large majority of the private-level-investor office deals in San Diego to outside investors from Northern California. “I often have conversations with local owners since the market and cap rates appear too frothy, in their opinions; however, investors in Northern California tend to find our market and returns relatively healthy in comparison.” He notes that many San Diego investors/owners are entertaining the idea of exiting the San Diego market and moving toward Arizona, Texas and Colorado.

We spoke with Totah about this trend, the reasons behind it and the appeal of other markets.