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

*Through 1Q
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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