Trepp Ranks the Top 20 Secondary Markets in CRE Finance

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Trepp has released new research on the top secondary markets in CRE finance, citing employment growth, CMBS origination and property fundamentals as key criteria.

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This research looks beyond those areas where an abundance of information is readily available and focuses on smaller markets, a number of which have exceptional growth for their size.

Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, has published new research on the top 20 secondary markets in CRE finance based on their data and accompanying metropolitan statistics. The report can be found here: http://info.trepp.com/secondarymarkets-2016-pressrelease.

Based on a multitude of employment, economic and commercial real estate data used to formulate the ranking, the Austin, Texas MSA topped Trepp’s list of secondary markets in CRE finance. Austin’s key statistics that propelled them to the top spot were the lowest unemployment rate and highest average DSCR for area properties out of the markets measured. The Denver, Colorado MSA came in second as the market generated the highest growth in CMBS originations and third-highest NOI growth for area properties out of the 20 metros that made the cut.

“A lot of commercial real estate analysis focuses on the nation’s largest markets,” said Trepp Senior Director of Research, Susan Persin. “This research looks beyond those areas where an abundance of information is readily available and focuses on smaller markets, a number of which have exceptional growth for their size.”

Trepp called upon eight factors to rank these secondary markets. The criteria measure absolute growth and relative growth, and each factor was given equal weighting. In addition to key data such as employment numbers and population growth, Trepp used the following CMBS criteria from their own database to tabulate their rankings:

  • CMBS originations from the first half of 2016 and the change from the first half of 2015
  • 2015 NOI growth averaged across the five major property types
  • Weighted average DSCR (debt service coverage ratio) of area properties

“Our secondary market rankings not only identify the fastest growing of these smaller markets,” added Persin, “but also pinpoint underserved markets that are rapidly budding. With this analysis, one may be able to identify metro areas where capital for real estate investment is perhaps less readily available.”

Trepp found that the top markets boast strong job and population growth as well healthy NOI progression. Markets in the middle such as San Diego and Charlotte generate healthy job growth while experiencing a significant decrease in CMBS originations this year. The markets at the bottom of Trepp’s ranking are characterized by slow growth and mostly declining CMBS activity.

For additional details, such as complete market rankings and corresponding statistics, download Trepp’s research on the Top 20 Secondary Markets in CRE Finance: http://info.trepp.com/secondarymarkets-2016-pressrelease. For daily CMBS commentary, follow @TreppWire on Twitter.

About Trepp
Trepp, LLC, founded in 1979, is a leading provider of data, analytics, and technology solutions to the global securities and investment management industries. Trepp specifically serves three key sectors: structured finance, commercial real estate, and banking to help market participants meet their objectives for surveillance, credit risk management, and investment performance. Trusted by the industry for the accuracy of its proprietary data, Trepp provides clients sophisticated, comprehensive models and analytics. Trepp is wholly owned by dmg Information, the business information division of Daily Mail and General Trust (DMGT). For more information, visit http://www.Trepp.com.

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Sean Barrie
Trepp
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