Passco Cos SVP Gary Goodman tells us investors looking for the best multifamily deals at the best prices should be in secondary markets. "We seek properties in secondary markets because the risk-adjusted returns are superior to those available in the primary markets," he notes, adding that many of these markets are experiencing little or no new construction and cap rates are up to 100 basis points better.

For example, Irvine-based Passco recently acquired the 300-unit Arlington at Eastern Shore in Mobile, AL, which Gary says has mantained more than 96% occupancy over the last two years, buoyed by increasing population and job growth in the region. "These markets often attract new companies seeking a right to work environment and local government tax incentives, resulting in good employment growth,” he explains. Passco paid nearly $43M for the property; Birmingham-based Rock Apartment Advisors facilitated the deal.