Tertiary Markets Capture Majority of Commercial Real Estate Deal Counts
According to Marcus & Millichap, tertiary commercial real estate (CRE) markets accounted for more than half of transaction deal counts across four major property types in the second quarter of 2026. This trend has been developing over a decade, with tertiary market share rising from 35% in 2010 to above 50%, while primary markets have seen their share fall below 34%. The shift reflects growing investor confidence and increased transaction velocity in smaller U.S. metropolitan areas. The increase is evident across office, retail, multifamily, and industrial sectors. Since 2017, tertiary market shares for these property types rose significantly: from 39% to 48% for offices; single-tenant retail climbed from 48% to 58%; multi-tenant retail increased from 41% to 52%; and industrial properties went from 37% to 51%. Multifamily, while still below a majority share, also saw an increase from 28% in 2010 to 40%. Yield premiums for tertiary markets have narrowed as competition has intensified. Cap rate spreads between primary and tertiary markets are now significantly lower than before the pandemic across most sectors, indicating that investors increasingly view smaller metros as viable alternatives with reduced perceived risk.
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Topics: CRE deal counts Marcus & Millichap report tertiary markets