GlobeSt.com: How was the $1-billion figure decided on?

McGuire: The program was designed around a company that we bought in the US called N3 Development, which is a small-shop retail developer. It historically had a development pipeline of $60 million to $80 million a year. We thought with that capital infusion we could easily manage $100 million a year of new developments. So we said: "Ten-year program, $1 billion. Sounds good." It's based on our current infrastructure and demand.

GlobeSt.com: What is the attraction to the net-leased properties?

McGuire: The attraction really is the cost to manage as an owner is significantly less. It's easy to underwrite your risk, but it's easier to underwrite on a single-tenant side. The model that N3 had shown, developing at a certain cap rate and the ability to bring a market value at a much lower cap rate, was a perfect combination.

GlobeSt.com: Are there any specific types of tenants that you're big on right now, like fast food?

McGuire: We're seeing a lot of activity from the fast-food arena. They're good, stable concepts, and in the current economy they'll still maintain their own growth because they have a recession-proof side of it. Surprisingly, some of the big money-center banks are still growing their branch systems. We're very bullish on those. And we're actually seeing some of the junior-anchor space that's a little recession proof, like the pet retailers. We're seeing some concepts there that we like.

GlobeSt.com: Are there ways since this has launched to deal with impacts from the economic downturn?

McGuire: There are fewer developers that are able to perform right now because they were so reliant on high-leverage deals. What you're seeing is in some of our markets where we were maybe going after the lower-credit tenants to fill our portfolio, there are other tenants that we hadn't had before that are losing their developers. We're picking up some other good concepts and picking up share with other credit tenant. Our competition is way down right now. There have been some developers that we've talked to over the years, and now they've come back saying they've lost some of their financing and have got exclusives with some of the banks of fast foods. We're actually leveraging that and creating some alliances with developers in other parts of the country.

GlobeSt.com: Has the downturn made you more focused on either developments or acquisitions?

McGuire: We've always been committed to developing because the tenants will always want to fine-tune their floorplan and develop a new product. On the acquisition side we've had a lot of calls about completed product, but there's the expectation of what they want to sell it for versus what we're willing to pay. We don't want to compete with 1031 buyers pricing wise. If we can build it for a 200 basis-point higher cap rate, then to go buy somebody else's product at a premium, that's kind of the bid-ask difference that we're seeing right now. We are looking at buying some completed product, but we're looking for some good discounts to maximize those dollars.

GlobeSt.com: What is the biggest challenge you'll have fulfilling the fund?

McGuire: Today you're seeing a slowing from the retailers, which is natural. We're also doing a little extra credit underwriting, whereas before, a frothy market could have bailed out some deals that weren't that great on the face of it. We're trying to be more judicious on putting this money into play. The other thing is getting a good tenant and geographic diversity. Aside from the economy today, that is going to be our greatest challenge going forward. How do we find those new tenants and get in those markets we're not in today?