Middle market commercial real estate: best for investment?
The answer is -YES!
Middle-market commercial properties have a historically higher capitalization rate over their primary market counterparts.
Over the previous seven years, the average cap rate for Class A multifamily properties within primary Tier I cities has routinely been below 4.5% whereas cap rates for Tier II and III cities have ranged anywhere from 4.5-7%.
Middle-market regions are experiencing a significant influx of Millennial and Generation Z workforce escaping expensive major metros.
In 2019, cities with the highest positive changes in occupancy rate were overwhelmingly in middle-market regions, besides Washington D.C.