Focusing on Tertiary Markets can produce higher ROIs

The CRE industry is continuing to excel, with strong demand in tertiary markets. Mirroring national trends, commercial real estate professionals in diverse local U.S. markets are experiencing strong interest, especially from out-of-state investors. Their biggest problem isn’t demand, it’s supply.

Tertiary markets excel in value-add opportunities, providing investors with strong returns in exchange for improving commercial real estate properties. Investors who seek fairly safe investments with a hold length of at least three years can often see a significant return on investment. When a market adjustment comes, tertiary markets often lag behind primary markets by a year or two and sometimes weather the storms better by being less volatile.

As the Commercial Real Estate industry, begins to level off, tertiary market properties remain a strong investment option.

“According to the CoStar Commercial Repeat Sales Indices (CCRSI) in September, property price momentum in smaller markets increased an average of 16.5% over the 12 months ended Aug. 31 of this year, far outpacing the average growth of 3.5% in major cities. Additionally, a 19.8% average increase in the pricing of smaller, lower-priced assets over the same period further indicate that more investors are targeting a wider range of properties across more markets” – Joe Gose, CoStar.

Tertiary markets are more difficult to lease and sell, based on their lower traffic count and smaller market base. Clift Marketing Inc (CMI) specializes in these tertiary markets.

CMI’s flat fee structure adds a larger increase on return in a tertiary investment property, allowing investors to make the most out of the deal. A list of CMI’s active properties can be found at http://cliftmarketinginc.com/properties.

Source: http://www.costar.com/News/Article/Investors-Pouring-into-Smaller-Markets-in-Search-of-Higher-Yields-Driving-Price-Momentum/194867

All feedback and comments are welcome! Mary Schlaff is the Director of Database Research and Development at Clift Marketing Inc; CRE specialists in tertiary markets. For more information, visit our website www.cliftmarketinginc.com. For further contact, Mary can be reached at 910.695.0884 or mary@cliftmarketinginc.com.