Category: Net Lease

100% Construction Financing for Net Lease? Yes, Really!

January 23, 2020

We often find ourselves complacent with “working” results and apply the why fix it, if its not too broken attitude. This applies to the landscaper, email services, car insurance, and even the barber who gives us bad hair cuts, yet we continue to go to him out of habit. But a capital partner? Having the right commercial real estate capital partner(s) can not only deliver more returns into your pocket, it can grow your business significantly.

We recently caught up with the a number of funds we work with to talk through their 2020 lending/investment strike zones. A handful of funds are offering 100% construction financing for net lease developments. If you are looking for STNL construction financing, or Net Lease construction financing and want to take the leverage to 100%, there are well priced financing options tailor made for STNL and Net Lease developments.

Continue reading 100% Construction Financing for Net Lease? Yes, Really!

Drug Store Sector Update

April 16, 2019

Contributing Author: Sean O’Shea

Certainly for the last decade or longer, the drugstore sector has been viewed by many single tenant investors, as a bond-like investment, in the sense that they had investment grade ratings (this has changed over the last decade, in part, due to the additional debt that has been incurred for various mergers in the sector); and predictable, stable income streams that were afforded due to absolute NNN lease structure of most drugstore tenants’ leases.  

There has been some concern, over the years, regarding whether these assets afford an inflation hedge, since in the case of Walgreens-Boot Alliance, that the rental income was stabilized or ‘flat’ for almost 75 years.  The CVS Health and Rite Aid lease structure can vary; but do afford some scheduled increases.

Continue reading Drug Store Sector Update

Time To Lock In Returns

February 20, 2019

Contributing Author: Sean O’Shea

There has been a lot of discussion, recently, in broader investment circles, that we have come through ten years since the “Great Recession of 2008-2009,” and that some scale of a Recession is on the horizon, whether Q4 2019 or mid 2020, which suggests, a round of “defensive investing” may be in order.

Having come through this period of historically compressed cap rates (higher prices) across all asset classes, none has been more pronounced than the NNN retail sector of the real estate investment industry.

Immediately after the Great Recession, when debt sources were becoming more diverse, both debt and equity were available, in abundance, in the multi-family or recycled housing sector, since you had a new captive audience of former home owners (newly created renters) who, in some markets, actually rented their own prior homes from their new hedge fund landlords, who had swooped in and bought up bank REO assets en masse in certain markets like Phoenix.

Continue reading Time To Lock In Returns

2019 NNN Forecast

January 09, 2019

Contributing Author: Sean O’Shea

As many much smarter ‘guys’ than me (and smarter women, too) are reviewing the last year; and struggling with Forecasts for 2019, at this time, there has been a lot of discussion about Fed Policy on rates and their impact.

Bloomberg had a recent interview with the legendary hedge fund and financial advisor, Stanley Druckenmiller, who was reviewing the last ten year era; and he was critical, then, (2009); and now, (2019) regarding rates and the liquidity implications of the unwinding of QE policies.

We think some useful language, is to characterize ‘asset bubbles’ or the asset inflation that these policies may have created as a real thing. Actually, many are referring to this period as the ‘Bernanke-Yellen Asset Inflation’ period.  

Continue reading 2019 NNN Forecast

What is the real role of NNN Properties in the Real Estate Industry?

June 19, 2018

Contributing Author: Sean O’Shea

It’s kind of funny to be considered, nominally, as a ‘nationally-recognized net lease expert’ after all these years.

My first exposure to this asset class was back a few decades ago, when I was charged with developing a real estate portfolio for a mineral-asset based Family Office in Fort Worth whose patriarch and predecessors were legendary oil wildcatters who wanted diversification to their Bond Portfolio.

My own background had been as a junior partner in a regional development firm with appropriate higher risk returns; and as a Shareholder of a regional commercial brokerage, whose business model was based on acute data and cultivating relationships, as the foundations for our demonstrative success in tough East Coast markets. Continue reading What is the real role of NNN Properties in the Real Estate Industry?

A Net Lease Asset History Lesson

April 04, 2018

Contributing Author: Sean O’Shea

We believe it is, in fact, helpful to have some historical sense of the evolution of the Net Lease Niche of the Real Estate Industry to have a better sense as to how these asset fit into the investment objectives of investors small and large in today’s maturing marketplace.

If you think about it, real estate, as an investment asset class, is a relatively recent development. It was always an entrepreneurial endeavor and was fueled as a worthy investment vehicle going back to the ‘mid-70’s and ERISA provisions, in those days total assets of private pension funds amounted to something like $164 billion dollars; today, of course, its in the “Trillions.” Continue reading A Net Lease Asset History Lesson

The Net Lease Niche

March 05, 2018

Contributing Author: Sean O’Shea

Over the last decade at various Net Lease Conferences on both East Coast (NYC) and West Coast (LA) I have been a Moderator and Panel Speaker. The most recent one was held in Los Angeles last week.

In attendance, were some of the giants of the Single Tenant Net Lease sector, like Realty Income, Angelo, Gordon & Co. and W.P. Carey. All multi-billion dollar asset owners who have enviable track records of consistent performance. They were an impressive cross-section of high net worth investors, Family offices and investment brokers from all of the major firms, SRS Partners, M & M, HFF, JLL (a lot of initials) and smaller service boutiques as well. Continue reading The Net Lease Niche

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