Smaller cities experience heightened office tower sales

Office property sales have increased in secondary markets.

Many second-tier cities around the country had trophy office towers put on the market by property management companies in recent months, which experienced a heightened level of interest from investors, according to Bloomberg.

Office property sales in non-primary markets consisted of more than 30 percent of all transactions during the first three quarters. In 2011, this level was less than one-quarter of all sales, the news source reported, citing a report from Real Capital Analytics. This may continue, as the Federal Reserve's promise to keep interest rates low encouraged investors to look for properties with higher yields.

"You're starting to see a healthy rise in volume as sellers try to take advantage of the recovery," Greg MacKinnon, economist and research director at the Pension Real Estate Association, told the news source. "It's spreading to the smaller markets because yields are pretty thin in the gateway cities."

Office sales increased more than 7.5 percent during the first three quarters to approximately $48 billion, the news source said, citing Real Capital Analytics. This could increase to $70 billion or more by year-end.

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