Question · Q3 2025
Paulina Rojas observed that InvenTrust's recent acquisitions have skewed towards secondary and tertiary markets and asked about the company's comfort with these markets representing a larger portfolio share. She also inquired if cap rates in less pursued markets, despite strong local demographics, reflect a market inefficiency rather than higher risk.
Answer
DJ Busch, President and CEO, stated that InvenTrust focuses on '18-hour cities' and doesn't strictly categorize markets, but acknowledged that in secondary/tertiary markets, the quality of assets must be higher (best or second-best in market). He noted that initial yields typically range from high fives to high sixes, leading to risk-adjusted returns in the sevens. He suggested that exiting California, a highly liquid market, allows InvenTrust to find arbitrage opportunities in other regions where demand dynamics differ.