When most people think of real estate investment, they think of gateway cities — New York, Los Angeles, San Francisco, Chicago, Boston. These markets are deep, liquid, and well-understood. They are also heavily competed, expensively priced, and yield-compressed to the point where generating strong risk-adjusted returns requires significant leverage or significant luck.
What Makes a Market “Secondary”
Secondary markets are cities in the 20–80 population rank range — places like Columbus, Indianapolis, Nashville, Raleigh, Salt Lake City, and Charlotte. These markets have meaningfully scaled economies (typically $100B+ in GDP), diversified employment bases, and strong growth fundamentals, but they trade at 100–200 basis point yield premiums to gateway cities simply because institutional capital has historically been slower to discover them.
This yield premium does not reflect greater risk — in many cases, secondary markets are structurally more resilient than gateway cities because their economies are more diversified, their housing costs have not detached as dramatically from income levels, and they have room to grow. When institutional capital does follow the fundamentals into these markets (as it consistently has over the past decade), the early movers benefit from both yield and appreciation.
RIYT’s Secondary Market Strategy
Our acquisition team maintains active deal pipelines in 22 secondary markets that meet our investment criteria. We have boots on the ground — local relationships with brokers, attorneys, developers, and municipalities — that give us access to off-market opportunities before they reach competitive bidding processes. This proprietary deal flow is one of our most durable competitive advantages.