646: Large Metro Investors Are Seeking Yield In Tertiary Markets

As major metros have become too expensive, investors are moving to tertiary markets in order to improve yield, thereby driving up prices in these markets. Smaller markets can be attractive because prices can be 50% less and rents not that much lower. Southern New Hampshire is a great example, as buyers from Boston and other markets are entering this market and paying record prices. Axel Ragnarsson, founder of Aligned Real Estate Partners, buys 10–50-unit value-add apartment buildings in Southern New Hampshire directly from sellers. Southern New Hampshire is a supply constrained, stable market with population and rent growth as residents are moving there from more expensive markets in the Northeast.