Commercial Business Booms in the Heartland
Investors are eyeing slower-growing markets to invest their money into and are beginning to bypass the coastal regions that have traditionally seen higher-appreciating markets.
Institutional investors figure they are better off investing in a market with just a 1 percentage point better annual return than paying a premium for property in a traditionally higher appreciating market. They hope to make their money back in stable rents, says Tripp Hardin, a principal at Trammell Crow Krombach Partners who specializes in office and light-industrial investment market.
Steady income on a well-priced property is especially attractive to companies looking for long-term cash flow, says Michael Cagna, a senior research associate with Colliers Turley Martin Tucker in Indianapolis. Cagna just published a study of Midwest markets as investment destinations.
"Along the coast, investors basically have to flip the property because their carrying costs are so much higher," Cagna says. "Here, their money goes farther, and they have to invest much less so they can hold on to the property longer."
Source: St. Louis Post-Dispatch, Riddhi Trivedi-St. Clair (01/04/07)