MIAMI—Are Canadian investors turning toward secondary markets in the US? With multifamily no longer the darling, Anthony Cocuzzo, a partner from Deloitte's Toronto office who leads the company's Americas regional real estate practice, thinks so.

In part two of this exclusive interview, we caught up with Cocuzzo to get his insights on these and other issues related to Canadian investment stateside. You can still read part one: Is Europe Stealing Canadian Investors From the US?

GlobeSt.com: Is multifamily still the darling? How do you see the appetites shifting?

Cocuzzo: No, multifamily is and was the safer play in a tumultuous market. But for a market in recovery such as the US currently is investment is flowing to opportunities with potential for higher capital appreciation and income growth, such as segments that suffered more under the crisis, such as office and retail. Multifamily has seen significant upward pressure on valuations as investment has poured into that asset class during the uncertainty of the last several years.

GlobeSt.com: Are there certain geographic areas that are a stronger focus for Canadian investors? How are Canadian investors picking their markets?

Cocuzzo: Not sure if one region stands out more than others: Large institutions are certainly more focused on core markets, such as New York, and have been for a while. But otherwise I think yield is the first filter, then evaluated against local economic fundamentals compared to long term economic performance in that region. I also think Canadian investors are more willing to look at secondary US markets—primarily the REITs—because there is more potential for upside and some secondary US markets have similar economic fundamentals to major Canadian cities.

GlobeSt.com: What trend lines are you seeing among Canadian investors?

Cocuzzo: With yields so low and REITs pulling back, the push is on for other markets to place capital.

GlobeSt.com: Is there any downside to the rush from Canadian investors? Is it creating more competition for US-based buyers? Are we getting too dependent on foreign capital?

Cocuzzo: Perhaps this question is best answered from a US perspective. Certainly Canadian capital increases demand for product, which is bad for buyers but good for vendors. In terms of dependence on foreign capital, I think it all goes in cycles and right now there is an influx of capital, whether it's too much will likely be more a function of what happens with Chinese outbound investment over the next decade.

GlobeSt.com: How long do you expect this interest from Canadians to last? Is this just a blip on the radar screen or a longer-term strategy?

Cocuzzo: It is a longer-term strategy to diversify holdings. But in terms of the current elevated levels of investment activity, it should continue as long as: a yield differential exists between Canada and the US, there continues to be a lack of product available in Canada, and there is an expectation that there will be a softening of the Canadian dollar, such as creating impetus to acquire now and increase US holdings.