How National Companies Evaluate Secondary Markets
Secondary markets, often called mid-sized metros, are getting a lot of attention right now, and for good reason. When you look at them on paper, they check a lot of boxes. Costs are lower, competition can be lighter, and in many cases there is real growth happening. It is easy to see why so many companies are drawn to them.
But the real (multi-)million-dollar question is—how do you evaluate whether a market is right for your business?
Most teams spend their time looking at the headline metrics. They compare labor costs, rental rates, incentives, and population trends. Those are all valid inputs, and you need to understand them, but they are not what ultimately determines whether the move is strategic for your operations.
AT A GLANCE: SECONDARY MARKET EVALUATIONS
- Attractive on paper: Lower costs, strong growth, and less competition
- Common mistake: Overweighting rent, labor, and incentives
- Where risk lives: Talent gaps, leadership strain, and operational complexity
- Best approach: Start with your operating model, then test market fit
- Incentives: A benefit, not a reason to move
- Bottom line: Success depends on alignment, not just cost savings
What Most Companies Focus On
Most companies begin by asking whether the market looks attractive. They want to know if the costs are lower, if incentives are available, and if the growth story is strong.
That approach makes sense. Those are the easiest things to measure, and they are often the first data points that surface in any expansion or relocation discussion.
The challenge is that those metrics only tell part of the story.
A market can look strong across every external measure and still create real challenges inside the business. We see it happen more often than most people expect. A company moves into a lower-cost environment expecting efficiency gains, but then runs into hiring gaps, leadership challenges, or operational inconsistencies that were not obvious during the initial evaluation.
Cost is relatively easy to model. Execution is not.
And that gap is where most of the risk lives.
How the Best Companies Actually Evaluate Markets
The companies that consistently make good decisions tend to approach evaluation differently. Instead of starting with the market, they start with their operating model.
They spend time thinking through how the business actually functions day-to-day and then evaluate whether the market can support it.
They consider:
- the type of talent they rely on and whether that talent exists in the market
- how leadership will be supported and how decisions will be made across locations
- how the market will impact communication, oversight, and overall operational complexity
Those factors are harder to quantify, but they tend to matter more than the cost savings that get the most attention early on.
Incentives are part of the conversation, but they are not driving it. The companies that approach this well treat incentives as an added benefit, not the reason to move forward. If the strategy depends on them, it is usually more fragile than it appears.
What stands out is that these companies are willing to slow down early. They spend more time aligning their real estate decisions with how their business actually operates, rather than reacting to what looks attractive on the surface.
Closing Thought
Secondary markets can create real opportunities, but they are not inherently better. The outcomes tend to come down to alignment.
When a market supports the way a business actually operates, the economics usually follow. When it does not, the cost shows up somewhere else, just in a different form.
Most of the time, the difference is not the market. It is how the decision was made.
Disclaimer
This article is for informational purposes only. It does not provide legal, financial, or investment advice.
Written by the Keyser Editorial Team
Frequently Asked Questions:
Q: What are secondary markets in the USA?A: Commonly recognized U.S. secondary markets include:
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Southwest / Mountain West: Phoenix, Denver, Salt Lake City, Las Vegas
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Texas: Austin, Dallas–Fort Worth, Houston, San Antonio (some may be considered “primary” depending on the audience)
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Southeast: Nashville, Charlotte, Raleigh–Durham, Tampa, Orlando, Jacksonville, Atlanta (often considered “primary-lite”)
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Midwest: Minneapolis–St. Paul, Columbus, Indianapolis, Kansas City, Cincinnati, Milwaukee, St. Louis
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West Coast (non-gateway): San Diego, Portland, Sacramento
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Northeast (non-gateway): Philadelphia, Northern New Jersey, Pittsburgh, Baltimore
