Smaller Metros Increase their Share of CRE Sales Activity
CRE Sales Activity Shifting Across Market Types
- Transaction activity was previously concentrated in primary markets
- The share of transactions in primary markets fell from 60% in the early 2000’s, to 34% by 2022
- Tertiary markets now house most transactions, accounting for almost half of deals
What is Driving Activity in Tertiary Markets?
- Properties often trade for a lower price and provide higher average yields
- Population growth rate has been faster in smaller metros
Will Sales Activity Remain Elevated in Tertiary Markets?
- Current demographic trends favor tertiary markets
- Primary markets would benefit from a return to the office
- Sales activity has increased across all property types
Trailing 12-month average; includes apartment, retail, office and industrial sales $1 million and greater
Sources: Marcus & Millichap Research Services, Real Capital Analytics, CoStar Group, Inc.
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