Tina Lichens

Office investment is picking up in suburban markets. According to a recent office sentiment report from Real Capital Markets, office investors are becoming more bullish on select suburban office markets with strong job growth. In fact, 37% respondents in the survey said that value-add deals in suburban markets were the best opportunities in office investment today.

“In large part, well-located suburban office buildings have increased in their attractiveness to investors because of the perception that we are late in this investment cycle coupled with investors’ focus on growth, value and yield,” Tina Lichens, COO at Real Capital Markets, tells GlobeSt.com. “These strategies are more difficult to achieve with many stabilized assets such as well-located downtown properties and trophy assets.”

The top markets for suburban office investment include Charlotte, Chicago, Kansas City, Minneapolis, Phoenix and St. Louis, according to the report. These office markets all feature highly trained labor force with population and job growth, and as a result, produce stabilized returns for investors. “The most popular of the suburban office markets typically offer common characteristics, including market stability, easy accessibility and proximity to strong housing areas and school systems,” says Lichens. “Markets with good fundamentals, including population and job growth, as well as a highly trained labor force are making the grade with investors.”