As the recovery in the commercial real estate market solidifies, the number and intensity of bidders looking for “core” properties in top-tier markets is at a fever pitch, making those assets expensive and difficult to find. A growing number of investors have turned their focus to secondary markets. Their goal is to invest in markets that are on the upswing, where cash flow is likely to increase and where investors can eventually exit with returns above today’s low acquisition yields.

That sounds good, but how do investors identify the best secondary markets? Most markets in the United States are performing well because a recovery’s rising tide tends to lift all boats. Smart investors want to be able to choose between markets that are temporarily being lifted by the influx of capital and general nationwide recovery and those that have qualities that will enable them to outperform over the long haul.

Commercial real estate demand is built on growth in jobs and p