Municipal Infrastructure Improvements and Sustainable Value Generation in Secondary Markets After the Boom

How Infrastructure Investments Are Shaping the Future of Secondary Markets

In the 21st century, secondary cities have become pivotal for sustainable economic growth, largely due to deliberate municipal infrastructure enhancements. As major urban centers like New York and San Francisco grapple with high costs and limited supply, cities such as Austin, Dallas, and Raleigh have seized the opportunity to fuel real estate and industrial expansion through targeted infrastructure improvements. This overview examines the transformative impact of these projects and provides guidance for investors seeking robust, future-ready markets.

The Power of Infrastructure in Urban Growth

Upgrades to municipal infrastructure serve as a cornerstone for both real estate and industrial advancement by lowering operational barriers, boosting connectivity, and attracting skilled professionals. Secondary markets, which already benefit from lower living and business expenses compared to coastal cities, see these advantages magnified through infrastructure spending. For example, enhancements along Austin’s I-35 corridor between 2020 and 2025 significantly increased industrial property absorption and drove up land prices. Despite a spike in industrial vacancies to 14.1% in Q2 2025 due to speculative construction, land values in Central Austin climbed 36.09% year-over-year, highlighting the corridor’s enduring importance.

Raleigh has also benefited from major infrastructure initiatives, including the expansion of RDU International Airport and the RTP 3.0 project, which have reinforced its status as a center for technology and logistics. By 2025, Wake County’s industrial vacancy rate tightened to 6.2%, propelled by the need for last-mile logistics and advanced manufacturing facilities. These results demonstrate that infrastructure investments not only spark immediate development but also generate ongoing economic momentum, attracting additional capital and business activity.

Quantifiable Growth in Emerging Cities

Dallas and Atlanta stand out as prime examples of how infrastructure can drive measurable progress. Dallas, which topped PwC and ULI’s 2025 commercial real estate rankings, has leveraged its affordability and accessibility to draw significant industrial and commercial investment. The Dallas-Fort Worth area posted impressive net absorption in both industrial and retail sectors, with investors focusing on value-add and core-plus opportunities. Atlanta’s strong job market and favorable demographics earned it fourth place in CBRE’s 2025 Investor Intentions Survey, underscoring its appeal among secondary markets.

Population trends further reinforce this narrative. From 2010 to 2025, Austin’s population grew by 35%, while Raleigh’s population increased by 19.84%. These surges, fueled by the rise of remote work and corporate relocations, have directly boosted industrial demand. For instance, the Pittsburgh area experienced a boom in industrial developments to support next-day delivery logistics, illustrating how secondary cities are adapting their infrastructure to meet shifting economic requirements.

Addressing Challenges and Ensuring Long-Term Success

Despite these achievements, secondary markets are not without obstacles. Oversupply in the industrial sector has become a concern; Austin’s industrial market saw an 80.3% decrease in net absorption in Q2 2025, largely due to an imbalance between large speculative projects and the actual demand for smaller, adaptable spaces. Nevertheless, ongoing reshoring initiatives and a highly educated workforce—supported by institutions like the University of Texas—position Austin for continued expansion.

Raleigh’s $8.3 billion in downtown development since 2015 exemplifies how diversified infrastructure investments can cushion short-term market fluctuations. The city’s emphasis on technology, healthcare, and education has built a stable economic foundation, with industrial vacancy rates expected to remain low as demand for advanced manufacturing persists.

Key Takeaways for Investors

For those looking to invest, secondary markets present an attractive mix of affordability, scalability, and growth prospects. The most successful strategies align with infrastructure projects that address both current needs and future trends. For example, the Texas Growth Corridor between Austin and San Antonio has seen Comal County’s population jump by 24.9% from 2020 to 2024, thanks to improved I-35 access and rising industrial demand. Such regions offer compelling opportunities where infrastructure directly supports value creation.

Additionally, the evolution toward experiential retail and flexible industrial spaces calls for adaptive infrastructure. Cities that focus on mixed-use developments and advanced logistics hubs—such as Raleigh’s RTP 3.0—are well-positioned to attract sustained investment and outperform their peers.

Final Thoughts

Infrastructure improvements in secondary markets are more than just short-term growth drivers—they are the foundation for lasting value. By lowering entry barriers, enhancing connectivity, and aligning with demographic and technological changes, these cities are reshaping the investment landscape. The lesson for stakeholders is clear: with strategic development, secondary markets can serve as models for sustainable, high-impact returns.