Trepp Releases Report Ranking Top Secondary Metro Areas for CRE Investment in 2022
In this report, Trepp analyzed the performance of 24 secondary metropolitan statistical areas (MSAs) creating a list of the top 10 areas for investment.
NEW YORK, Sept. 1, 2022 /PRNewswire-PRWeb/ -- Trepp, a leading provider of data, insights, and technology solutions to the structured finance, commercial real estate (CRE), and banking markets released another edition of the annual research report ranking the top secondary metro areas for CRE investment. Instantly access the complete report here: Trepp Secondary MSA Report 2022.
In this report, Trepp analyzed the performance of 24 secondary metropolitan statistical areas (MSAs) creating a list of the top 10 areas for investment. The year 2021 ended with level-breaking records of issuance in the commercial mortgage-backed securities (CMBS) market, and that pace looked to continue in 2022 as first-half issuance remained strong. However, macroeconomic factors like the war in Ukraine, rising interest rates, and rampant inflation have caused market slowdowns across the world, and the CRE market is no different.
"This year, the findings were heavily made up of the MSAs that have found a way to heal from old distress and manage new economic outcomes. A common theme in these MSAs was low CRE distress and low unemployment levels – pointing to areas that have been able to make up ground on their pandemic losses while also maintaining through this economic cycle," said Maximillian Nelson, report author and Trepp Research Analyst.
This year's ranking methodology has been improved in order to capture a more modern-looking market. CRE collateralized loan obligations (CRE CLOs) have been added to reflect the changes in recent years' issuance. Additionally, agency data (aka Fannie Mae and Freddie Mac loans) have been added to this year's dataset, adding insight into where investors are putting money to work under the Freddie and Fannie loan programs.
The Seattle-Tacoma-Bellevue, WA- MSA ranked first in Trepp's report, ahead of the San Jose-Sunnyvale- Santa Clara, CA and Orlando-Kissimmee-Sanford, FL MSAs. These three metro areas benefited from investment profiles with strong weighted average debt service coverage ratios (DSCRs), high outstanding volume growth (OVG) since 2020, and low distress rates (delinquency and special servicing rates) despite economic uncertainty.
Trepp called upon seven data variables to complete the rankings, giving each an equal weighting. In addition to key data such as employment numbers and population growth, Trepp used the following criteria from their own commercial loan database to tabulate their rankings:
- New CMBS issuance in the region
- MSA Outstanding Volume Growth Rate (OVG).
- The percentage of delinquent loans and loans in special servicing
- And more.
For the complete list of metro areas and corresponding statistics, instantly download Trepp's report here: Trepp Secondary MSA Report 2022. For daily commercial real estate updates and news, follow @TreppWire on Twitter.
About Trepp
Trepp, founded in 1979, is a leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the solutions and analytics they need to increase operational efficiencies, information transparency, and investment performance. From its offices in New York, San Francisco, and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance, and portfolio management. Trepp subsidiary, Commercial Real Estate Direct, is a daily news source covering the commercial real estate capital markets. Trepp is wholly owned by Daily Mail and General Trust (DMGT).
Media Contact
Riley Cox, Trepp Inc., 2127541010, [email protected]
SOURCE Trepp Inc.
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