ATLANTA—24-hour gateway cities are always hot among commercial real estate investors, but there's a new breed of cities rising. At the same time, secondary and class B multifamily markets are hitting the radar screen of some REITs.

GlobeSt.com caught up with Ella Shaw Neyland, president of Steadfast Apartment REIT, to talk about these trends in part one of this exclusive interview. Be sure to come back later this week for part two, where she will talk about value-added multifamily investment strategies.

GlobeSt.com: What are the hottest commercial real estate markets to watch right now?

Neyland: While the 24-hour gateway cities are still attractive to many investors, the emergence of the “18-hour cities” like Austin, Denver, Atlanta and Nashville are the hot markets Steadfast focuses on. These markets are where the majority of job growth is happening and offer residents the benefits of a larger urban area at a significantly lower cost—particularly in housing. Additionally, the more moderate cap-rate compression in these markets provides an opportunity for superior yields.

GlobeSt.com: How can secondary markets and class B assets successfully compete against primary markets?

Neyland: Primary markets, especially the “sexy 6,” are popular because of their downtown, urban lifestyle. However, with this lifestyle comes a cost.

These apartments tend to be pricy luxury units that cater to high-income renters—outpricing a significant portion of renting households. Steadfast has a strong secondary market presence in the central United States where apartment rents meet the financial needs of the average working American.

Our renters need to make $35,000 per year. That is a three to one ratio of income to rent. It is also the median income of people under the age of 35. Unlike its primary counterparts, these secondary markets are more resilient to economic downturns because of constant demand for affordable, quality apartment homes.