BETHESDA, MD—Investors in the multifamily sector are turningtheir gaze outside the urban core. Capital One's fourth annualsurvey of investor sentiment, conducted at the RealShare Apartmentsconference in Los Angeles, found that 43% are looking atsecondary/tertiary markets, or more than twice as many as those whosaw the greatest potential for value in urban markets, whileanother 35% said they see the best opportunities in the suburbs. Ayear ago, a plurality—47% of respondents—cited urban markets as theleading opportunity.

“All signs point to the multifamily sector heating up in 2018,”says Jeff Lee, president of Capital One Multifamily Finance.“Investors are looking to engage in secondary and tertiary markets,where they see increasing opportunity. These markets have seen rentgrowth, and their broad appeal should generate interest andactivity as we head into 2018.”