As a cycle matures and cap rates compress, investors typically head to secondary and even tertiary markets in search of yield. However, investors tend to return to core markets during a downturn, after prices drop and the yield potential is brighter. In the long run, although secondary markets experience growth, they still see more risk during a downturn than core markets.

"Any time there is a dip, investors go back to the core markets," Steve Jacobs, CEO of Ten-X Commercial, tells GlobeSt.com. "When there is a dip, investors can get a better deal in Los Angeles or San Francisco. Core has always been more desirable, but as those get too expensive, they go to the next bucket, which is the sunbelt and then secondary and tertiary cities. Investors would rather buy an asset outside of Boston than outside of Detroit."

The rush to secondary markets is natural, for investors as well as companies, both of which are looking for a deal in the midst of high prices. "When core markets get too expensive, it is natural for people to move to Las Vegas because it is cheaper," says Jacobs. "The same with businesses. If a business can get out of an expensive market and move to a secondary market, they will and they do."

Jacobs uses the example of Las Vegas, which was hit very hard during the last recession. However, while the market has recovered, he says that it isn't fundamentally different that it was in the last run-up. "If you look at Las Vegas, for example, it has this huge run-up and then a collapse," he says. "It wasn't only in residential but also in desirability. As we have recovered, the market place has also recovered, but businesses are questioning if they want to be in Las Vegas because it is more desirable for employees and clients to be in a primary market. So, I do think there is risk in secondary and tertiary markets during a dip."

Another sign that core markets remain a better long-run bet is that large tech companies, like Amazon and Yahoo, are choosing to expand in core markets. "If there is a dip and an investor is looking to invest, they are going to look at the core markets first because it is a safe place to be," says Jacobs. "It is a safe investment. The minute you go to the secondary markets, even if it is a good market with good dynamics, but those are the markets to be hit hardest when there is a dip."