Publications

- June 1, 2013: Vol. 25, Number 6

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Back for seconds: As yields shrink in gateway markets, secondary cities are finally grabbing attention

by Anna Robaton

 

Throughout most of this economic recovery, the so-called Sexy Six U.S. markets, along with a handful of foreign cities, have had a virtual lock on major real estate investors.

Chastened by the losses many suffered in smaller markets, investors sought high ground during the early years of the recovery in Boston, Chicago, Los Angeles, New York City, San Francisco and Washington, D.C., as well as a few dominant European and Asian cities. Primary cities saw their central business districts bounce back relatively quickly, which only strengthened their appeal.

Between 2010 and 2011, half of all global direct commercial real estate investment was concentrated in 30 cities, according to a report issued last year by Jones Lang LaSalle. Of those, five cities — Hong Kong, London, New York City, Paris and Tokyo — saw nearly a quarter of investment

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