This study highlights those secondary MSAs with ample investment potential spurred by demographic growth and commercial property performance.
NEW YORK (PRWEB) August 23, 2018
Trepp, LLC, the leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has published new research on the top 20 secondary US markets for CRE investment. The report can be requested by filling out the form here: https://info.trepp.com/trepps-ranking-of-the-top-20-secondary-markets-pr.
Based on a multitude of economic and commercial real estate data used to formulate the overall ranking, the Austin, Texas MSA tops Trepp’s list of CRE markets which are most ripe for investment. Austin has the lowest delinquent loan rate and highest population growth rate of the 20 metropolitan statistical areas (MSAs) measured. The Orlando, Florida MSA came in second after Austin and Nashville, Tennessee was ranked third.
"Thanks to high CRE values and drum-tight cap rates, property investors are finding fewer opportunities for risk-adjusted returns in top-tier markets," said Joe McBride, Director of Applied Data and Research at Trepp. “This study highlights those secondary MSAs with ample investment potential spurred by demographic growth and commercial property performance.”
Trepp called upon six data variables to rank the markets in its study. Once data was collected, Trepp researchers conducted a multiple regression to test the relative importance of each variable and assign a weight to that variable. 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:
- The volume of CMBS loans issued during the 12-month period which ended in May 2018 compared to the prior 12-month period.
- The percentage of delinquent loans measured in May 2018 against May 2017.
- The average debt service coverage ratio (DSCR) level weighted by each loan’s outstanding balance.
The four lowest-ranked markets are all based in the Midwest US. The Cincinnati, Ohio MSA was ranked as the worst-performing market, due in large part to its high delinquency reading and low average occupancy rate. Other Midwest MSAs near the bottom of the ranking are Indianapolis, Kansas City, and St. Louis.
For the complete list of metro areas and corresponding statistics, request Trepp’s ranking of the Top 20 Secondary MSAs: https://info.trepp.com/trepps-ranking-of-the-top-20-secondary-markets-pr. For daily CMBS and CRE commentary, follow @TreppWire on Twitter.
Trepp, LLC, founded in 1979, is the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their 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 is wholly-owned by Daily Mail and General Trust (DMGT). For more information, visit http://www.Trepp.com.