Secondary Markets Spotlight: Where CRE Investment is Flowing in 2025

Big cities will always get big headlines. But if you’ve been watching commercial real estate trends over the last few years, you know the most compelling stories are no longer playing out in the usual places.

In 2025, it’s the secondary markets—those mid-size metros and emerging regional hubs—that are attracting serious CRE investment. And this isn’t just a post-pandemic fad. It’s a structural shift in how companies think about space, workforce access, and long-term returns.

The combination of remote-friendly corporate models, infrastructure funding, and population migration is creating new opportunity zones—both literally and figuratively.

Let’s take a closer look at where investors are going, and why these smaller markets are having such a big moment.

What Defines a “Secondary Market,” Anyway?

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A secondary market isn’t just “smaller than New York or L.A.” It’s typically defined as a metro area with a growing population, stable economic fundamentals, and attractive cap rates relative to primary markets.

Think: Austin, Charlotte, Tampa, Raleigh, Nashville, Salt Lake City, Columbus.

These cities tend to offer:

• Lower acquisition costs
• Higher risk-adjusted returns
• Strong in-migration and job growth
• Less regulatory red tape and permitting delays​​​

They’re not sleepy towns. They’re agile cities—places where tech firms, logistics companies, and hybrid office models are testing what’s next.

In fact, a 2024 CBRE investor sentiment report found that over 60% of respondents plan to increase investment in secondary or tertiary markets this year, citing long-term growth potential and asset diversification.

The Macro Drivers Behind the Shift

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What’s pushing capital out of gateway cities and into regional markets?

1. Remote and Hybrid Work Models

The lasting effect of workplace flexibility has opened the door for office and flex-space growth outside of traditional business districts. Suburban campuses, creative office redevelopments, and mixed-use nodes are gaining traction in affordable metros.

2. Logistics and Industrial Expansion

The e-commerce boom hasn’t cooled—it’s matured. That means more demand for last-mile distribution hubs and strategically placed warehouses, especially in cities with good highway access and lower land costs. Markets like Louisville, Greenville, and Kansas City have been winning big in this arena.

3. Population and Talent Migration

People—and companies—continue moving to states with lower taxes, business-friendly regulations, and a better cost of living. That’s why Sun Belt metros remain dominant in 2025. U-Haul’s 2024 Growth Index puts states like Texas, Florida, and Tennessee at the top of the list for net one-way moves.

More people = more jobs = more demand for commercial space.

Where CRE Investors Are Focused Right Now

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Let’s zoom in on some of the secondary markets getting the most attention in early 2025:

Tampa Bay, FL

With a booming population and a healthy mix of industrial, medical, and hospitality development, Tampa continues to be a darling for multifamily and mixed-use investors. Florida’s no-income-tax status doesn’t hurt either.

Columbus, OH

Intel’s multibillion-dollar chip plant has turned Columbus into an unexpected tech magnet. Office and industrial space near the development corridor is being snapped up quickly by early adopters.

Boise, ID

Yes, still. Boise’s downtown revitalization, rapid in-migration, and relative affordability keep it on the radar for CRE investors targeting flexible office, boutique retail, and live-work spaces.

Raleigh-Durham, NC

A classic example of a research-and-education-driven economy that’s now maturing into a tech and life sciences hub. Investor interest in lab space and Class B office conversion is rising sharply.

These markets share a key trait: they’re pro-growth without being overbuilt. That balance is driving long-term confidence.

Risk Isn’t Gone—It’s Just Different

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Let’s be clear: secondary markets aren’t risk-free. Liquidity can be lower. Tenant mix is often less diversified. And smaller markets are more sensitive to local policy changes or single-employer shifts.

That’s why savvy investors focus not just on growth trends, but on fundamentals: vacancy rates, absorption data, infrastructure investment, and anchor institutions.

Platforms like NAIOP and REIS/Moody’s Analytics offer detailed CRE performance data to help investors evaluate local dynamics before committing capital.

Final Thought: Think Small to Win Big

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Commercial real estate is no longer a one-city show. In 2025, the most strategic investors aren’t chasing prestige ZIP codes—they’re looking for value, stability, and upside in places where demand is growing and competition is still manageable.

Secondary markets offer just that. But they also require local expertise, nuanced analysis, and a long-term view.

Because in today’s landscape, success isn’t just about where the towers are going up—it’s about where people are actually going.

And increasingly, that’s not just Chicago or San Francisco. It’s Chattanooga. It’s Omaha. It’s Ocala.

Welcome to the next wave of CRE.