When the webcast moderator, John Salustri, content director of ALM Real Estate Media Group, polled the audience on the biggest challenge in working in secondary markets, 43.6 percent said slower recovery, 19 percent said lower valuations and ROI, and 37.2 percent said less robust employment base.
But regardless of where on the map you set your targets, rewards won’t come easy. Richard Walter, president of Faris Lee Investments, said that while there is still rough going in some of these markets, “There are gems, especially those where there are some driving reasons.” Some of the “driving reasons” or typologies mentioned by panelists include state capitals, or university areas, where multifamily has been successful.
Panelists said they know a secondary market when they see it. “We like to think of secondary markets as cities that are off the beaten path… but not too far,” said Whitney Greaves, co-head of U.S. apartment strategy at Paladin Realty Partners.
