How We Structure Underwriting for Acquisitions in Secondary Markets

By Kyle Gibbons, Head of Acquisitions, CommercialGRP

Underwriting is where discipline shows up. At CommercialGRP, my role is to lead the sourcing and evaluation of industrial and retail opportunities that fit our buy box—while ensuring every acquisition stands up to scrutiny in real-world market conditions. Nowhere is that discipline more important than in secondary markets.

Secondary markets offer compelling opportunities, but only when underwriting is structured with precision, transparency, and an honest assessment of risk. Our process is intentionally rigorous—not to slow deals down, but to ensure we acquire assets that create durable value for investors and meaningful impact for the communities they serve.

Starting With Market Fundamentals

Every underwriting process begins with the market, not the asset. In secondary markets, assumptions that work in primary metros often don’t translate directly.

We focus on:

  • Employment drivers and tenant demand, particularly for users in the 15K–120K SF industrial range
  • Supply constraints and replacement costs, which often support downside protection
  • Local broker insight, validated through direct conversations—not just reports

This market-first approach allows us to underwrite with context rather than optimism. For a broader view on how we evaluate markets, see our post on identifying strong secondary market fundamentals.

Property-Level Analysis: Details Matter

Once a market meets our criteria, we move to asset-level underwriting. This is where being self-reliant and detail-oriented matters most.

Our evaluations include:

  • Building functionality: clear heights, loading, column spacing, and adaptability
  • Deferred maintenance and realistic capital expenditure planning
  • Tenant credit, lease structures, and rollover risk
  • Exit liquidity within the local buyer pool

We intentionally stress-test assumptions. If an asset only works under best-case scenarios, it doesn’t move forward. That discipline reflects our commitment to honesty and integrity—both with ourselves and with our investors.

If you’re interested in how we approach physical due diligence, our article on avoiding underwriting blind spots in industrial acquisitions provides additional insight.

Structuring Conservative, Transparent Assumptions

In secondary markets, conservative underwriting is not a limitation—it’s a competitive advantage.

We structure assumptions around:

  • Realistic rent growth tied to local demand, not national averages
  • Vacancy and downtime that reflect historical leasing velocity
  • Exit cap rates that prioritize capital preservation over multiple expansion

Equally important is how we communicate these assumptions. Being outstanding communicators means our investors understand not just the upside, but the risks and mitigants built into each deal.

Aligning Acquisitions With Community Impact

Every acquisition must do more than fit the model. At CommercialGRP, our core focus is acquiring assets that contribute positively to their surrounding communities.

That often means:

  • Supporting local businesses through functional, well-maintained space
  • Repositioning underutilized assets to meet modern industrial or neighborhood retail needs
  • Creating environments where tenants can grow and employ local residents

Our underwriting accounts for this long-term view. Assets that strengthen communities tend to perform better over time—and align with our responsibility as owners.

You can read more about how this philosophy shapes our decisions in investing with long-term purpose.

Discipline Creates Opportunity

In secondary markets, success isn’t driven by speed alone—it’s driven by structure. Our underwriting process is designed to be repeatable, transparent, and resilient across market cycles. That approach reflects our values: motivated and committed, precise in execution, and grounded in integrity.

A Professional Invitation to Connect

If you’re an investor seeking disciplined acquisitions in the industrial and retail sectors—or interested in understanding how we evaluate opportunities in secondary markets—I welcome the conversation. We believe clear underwriting and aligned expectations are the foundation of successful partnerships.

Connect with us to explore how CommercialGRP approaches acquisitions with rigor, transparency, and a long-term perspective.