GlobeSt.com: Which particular markets are most attractive to you?

LaPuma: With every deal we do we try to diversify our portfolio. We've already invested in the UK, France, the Netherlands and Scandinavia. And we're currently in negotiations with a German company.

GlobeSt.com: Which types of property do you find most attractive? And is sale/leaseback appropriate for specialized facilities?

LaPuma: Retailers were the first because real estate is such a substantial element of their portfolio, but now we are seeing industrial and service companies using sale/leaseback. And there's no reason why a specialized facility should be a bad investment. Obviously there's a premium, but if we do a good job underwriting and the company is there to pay rent over a 20-year period, there's very little exposure left. Take Rave Reviews movie theaters as an example. There are very few assets more specialized than a movie theater, but we did all of their first three properties alongside Boston Ventures.

GlobeSt.com: You must get far more propositions than you complete. How do you select the properties you decide to go with?

LaPuma: We look to find beauty where other people can't see it. We don't mind paying a premium where we see beauty but at the same time we don't have to invest for investment's sake. We don't sell our assets and therefore in 20 years time when the lease expires the company will likely still be talking to us. Our investors take the same long-term approach, so every day we face the same dichotomy: we aim to provide attractive returns to our investors, but the companies we do business with are also our clients.

GlobeSt.com: Corporate real estate executives are always saying that they want to extract the maximum flexibility from their properties. Isn't there an inherent contradiction when they sign up for a 20-year lease with you?

LaPuma: Doing a long-term lease is a smart decision for one main reason. Real estate is a long-term asset, and you can match that long-term asset with your long-term liabilities. Companies like telecom operators have a lot of long-term liabilities. Every CEO and CFO should consider this, even though interest rates are at an all-time low. Companies have equity and they have debt. This is just an alternative class of finance. And it's equally applicable to private companies not rated by the credit agencies. The most under-utilized form of financing is sale/leaseback.

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