DALLAS—The nature of secondary and tertiary markets’ appeal to investors has evolved. For a while there, the rap on properties in smaller markets was that they offered a higher-yield alternative to the core CBD assets everybody was chasing—and bidding up. Now, says Mitchell Hunter at Trimont Real Estate Advisors, yield isn’t the only reason that buyers are looking outside the core.
“There’s so much capital that has been raised, people are gravitating to these assets simply because they need a place to put their money,” the Dallas-based Hunter tells GlobeSt.com. “So there’s a trickle-down effect into these markets.”
Managing director of the Central Region for Trimont and recently named to oversee the team responsible for special asset management, the 23-year industry veteran is set to provide insights into the CMBS market as one of the industry experts on the “CMBS Report Card: Is The Upturn Ending? Plus! A Closer Look at Today’s Special Service Providers” panel during the upcoming RealShare National Investment & Finance conference. It’s set for Oct. 5 and 6 at the Roosevelt Hotel in New York City.
Even so, the cost of debt remains marginally higher for assets in secondary and tertiary cities. “We’re seeing a slight increase in those rates” compared to what lending sources may charge for debt on core assets, says Hunter. However, he points out that those rates are still very low compared to historical norms.
Moreover, “debt is available across the board” in the smaller markets, he says. Just as investors want to place capital, so lenders want to place debt. “We have many clients in the traditional bridge-lending space” who are active in deals for secondary and tertiary markets, says Hunter, especially with CMBS issuance down substantially thus far in 2016.
More than 300 of the industry’s leading national investors, REITs, banks, private equity firms, asset management firms and other institutions will ###a href="join" class="redactor-linkify-object">https://www.eiseverywhere.com/... us as we explore the market conditions behind the trends at this year’s RealShare National Investment & Finance, scheduled for Oct. 5 and 6 at the Roosevelt Hotel in New York City. Learn more.
About Trimont Real Estate Advisors
Trimont Real Estate Advisors (trimontrea.com) is a real estate financial services provider with over $110 billion of client assets under management, providing services to commercial lenders and investors since 1988. Trimont is the leading provider of asset management, servicing, due diligence and advisory solutions to commercial real estate clients around the world. The firm has approximately 230 employees among six offices in Atlanta, Dallas, Los Angeles, New York, London and Amsterdam. From these offices, Trimont has managed approximately $225 billion of invested capital for clients on more than 17,500 assets with $500 billion of property value. Trimont has provided services to its clients in 61 countries.
Trimont is a highly rated primary, special, and construction servicer, with particular expertise in repositioning and development deals. Trimont is rated by Standard & Poor's as a Commercial Mortgage Special Servicer (Strong) a Construction Loan Servicer (Strong), and Commercial Primary Servicer (Above Average). It is rated by Fitch as a Primary Servicer (CPS2+) and a Special Servicer (CSS2), and by Kroll Bond Ratings, Inc.