Gateway Markets and Core Property Types: Not What They Used to Be

Gateway Markets and Core Property Types: Not What They Used to Be

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William Pattison Michael Steinberg Derek Tong Jacob Kurosaki Kiel Deitrich
FEB 20, 2024

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Key Takeaways

  • To our surprise, we found there has never been an authoritative methodology behind the commonly used real estate categorization of “gateway markets” or “core property types.” We believe both definitions should be based on high transparency and high stability of expected returns and outline our recommendation in this report.
  • Despite there not being a consensus on the methodology, “core property types” has been synonymous with office, retail, industrial and apartment investments. Within the U.S., gateway markets have meant New York City, Boston, Washington D.C., Chicago, San Francisco and Los Angeles.
  • Based on our proposed methodology, as well as changes in market conditions in the last 40 years, Atlanta, Dallas and Seattle rank highly as gateway markets, while once “niche” alternative sectors like manufactured housing and single family rentals may exhibit traits of core property types.
  • We believe gateway markets and core property types should be reevaluated every five to ten years