Tech Heads South

Booming secondary markets in the South draw a tech crowd.

A number of overlooked influencers - including heavy technology company migration - are fueling the bullish secondary real estate markets of the southern U.S.

While residents have long grappled with extremely high living costs in primary markets, they did so due to the quality of life, jobs, and wages available to them. With recently booming economies in many secondary markets, however, they now can enjoy the same quality of living at a much more affordable cost.

For tech companies, the high quality of life in these markets creates a flow of new residents - and a pool of hungry job seekers. Established industry talents are more willing to accept roles and relocate to these areas, even if that means leaving major markets.

With a dissipating concern over a lack of talent in non-primary markets coupled with continuously rising international outsourcing costs, tech companies are focusing more on reducing operating costs by heavily targeting secondary markets in which to start up, grow, and thrive. Secondary real estate markets in the South have had great success over the last decade, and these often-overlooked influencers seem to be playing a large part. For investors looking south, it's not a matter of if there is opportunity, but simply a matter of how much and where it lies.

Four economically booming southern U.S. markets - Atlanta, Dallas, Orlando, Fla., and Nashville, Tenn. - are leading the growth and potential growth market of multifamily and office property sales trends in that region. 


Since the recession of 2008, investors are all-in on the city, and have been for quite some time. The number of sales reached a low point in 2010, sitting at just 875 total combined sales across multifamily and office properties.

Comparing 2017 to 2010 results, multifamily sales grew by 161 percent, and office sales grew by 238 percent,  collectively increasing nearly threefold to 2,384 total sales in 2017.

More recently, Atlanta shows potential as one of the country's  next tech hubs, courting the likes of Amazon to open an HQ2 in the city. Atlanta's recent success as a fintech hub, from giants like First Data and Worldpay to newer disruptors like Kabbage, Cardlytics, and Greensky, as well as forthcoming relocation of major offices from other large Seattle companies, shows that the city's growth may be far from over.


The number of multifamily property sales continues to trend upward since 2009. This trend may be due to the lack of prices increasing within that same time period, with the exception of 2016.

In 2016, average sale price saw a steep increase, which can be traced back to two substantially large bulk mobile home park sales.

While the decade-long trend shows only a 15 percent increase in the average multifamily sale price, the market saw a 70 percent increase in the number of sales.

Office property sales, however, have remained fairly stagnant in the last decade in terms of both number of sales and sale price. If anything, given the recent investment focus on multifamily properties, there may be room to capitalize on Dallas' inventory of office buildings, although no immediate opportunity stands out.

Orlando, Fla.

Recent trends reveal a missed opportunity in multifamily properties, with the potential conversion of the city's office property inventory not yet fully realized.

Since 2014, the average sale price of multifamily properties in Orlando has risen significantly, while the number of sales has been on a gradual decline.

With existing multifamily properties tapped out and prices climbing, an opportunity in the city's office market has come to fruition.

Similar to multifamily, the number of office sales in Orlando also has been trending down since 2014. However, for office properties so is the average sale price. In 2017, the average sale price per office building reached its lowest point in four years, roughly $1.77 million.

Despite that, over the course of 2016 and 2017, Orlando saw the highest rate of science, technology, engineering, and mathematics growth in the country.

Nashville, Tenn.

In terms of overall investment growth over time, Nashville looks to be the hottest market of the lot. Both multifamily and office property sales continue a steady trend upward over the last decade, as recession recovery has turned into financial prosperity.

The combined average sale price of multifamily and office properties in Nashville decreased by 18.4 percent in 2017 compared to the year prior.

With Nashville's viability as a U.S. tech hub looking strong as investment trends upward, this city's growth shows no immediate signs of slowing down.

Where Opportunity Lies

The overall growth trends of these cities since the recession reveal just how much investors have been pouring capital into each market. As the snowball effect of the tech industry continues to pile up, however, these markets look to prosper further.

In 2017, multifamily and office property sales in all four markets combined came in at 6,286 total sales - a 98 percent increase over its low point in 2009 of 3,172 sales.

In 2017, Atlanta's sales were 148 percent higher than they were at its low point in 2009, marking the largest increase of the four markets. Nashville's sales were not far behind, with 2017 sales being 140 percent higher than in 2009.

Additionally, Nashville remains the cheapest market on average, with a combined average sale price of $1.4 million in 2017. Atlanta, despite rising prices, also is still a very accessible market, and Orlando shows high potential in its office investment market.

The wide-spanning success of these markets and the seemingly minute factors influencing them show that each market presents opportunities. From a growing workforce to a relatively affordable office and multifamily investment market, opportunities in these up-and-coming areas can pay out dividends. Understanding these secondary market trends may be the next step for many investors looking for strong and steady growth.


Richard Sarkis

Richard Sarkis is CEO and co-founder of Reonomy, a commercial real estate data and analytics platform based in New York. Contact him at Learn more at


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