The 23-year-old, Tulsa, OK-based Stan Johnson Co. focuses on single-tenant investments. Additionally, the company's capital markets group helps source debt financing for clients. Since its founding, the firm has closed about about $7 billion in transactions across various property types. GlobeSt.com recently spoke with company president Phil Baxter.

GlobeSt.com: A little more than a year ago the company reached $6 billion in closed transactions. What was your annual volume in 2007, and what are you expecting for '08?

Baxter: We reached the $6 billion milestone in April of '07, and in December of '07 we went past the $7 billion mark. 2007 was a great year for the Stan Johnson Co., with a total of $1.5 billion of closed transactions. So far in 2008 market conditions have been difficult. Many of our competitors are reporting volume down 50% to 70% year-to-year. We are expecting to be down somewhat, but only in range of 25% to 30%.

GlobeSt.com: What accounts for that?

Baxter: We believe it's the fact that we are specialized in net lease, that we are recognized by and large as the authority in the space, and that we have been able to work through some of the more difficult challenges that this market has given us.

GlobeSt.com: Any secrets you want to give away?

Baxter: It's not a secret really. It's specializing. That's a continual strategy that really drives our company, versus a more generalist approach from our competitors, and we do believe it gives us, among other strategies we employ, a competitive edge.

Q: What have been the most significant changes in the market, particularly the net-lease sector?

Baxter: When Stan started the firm back in the '80s, net lease was in its infancy. It was a true small niche, with few players. Over the years the net lease market has grown tremendously. Today it is a very mature industry and mainstream, with virtually every firm doing some net lease transactions. I believe the biggest change is that move from niche to mainstream. Buyers and sellers have become more sophisticated, and deals are larger and more complex, requiring more skill and knowledge from brokers.

GlobeSt.com: What significant changes do you see happening now and in the future?

Baxter: Facing us immediately today is the issue of liquidity, due to the credit crunch. Sellers are holding out longer in terms of hopes of seeing last year's prices return. Buyers are holding out longer in hopes of further price correction. That has created a wide spread between bid and ask, which makes a broker's job more difficult.

Over time we expect the market to normalize and that gap to narrow and the liquidity issue will resolve itself. The question is when. So now it's a difficult market, but we tend to look longer term. We believe the net lease market will continue to grow and evolve and we believe today it's large enough to warrant firms to continue to specialize and develop their expertise in that single product versus a generalist approach.

In fact, we see brokers gravitate to particular sub-niches, if you will, within net lease, whether it be retail, medical properties, corporate sale-leasebacks, zero-cash flow deals, etc. In the medical field, it's like the difference between being a general surgeon or heart specialist.

It's hard to predict the future. I see the market evolving back to where we were, but I continue to see the net lease market growing and being further stratified into these sub-niches of specialization.

GlobeSt.com: What transactions are the easiest to close these days? On the other hand, what are the most challenging?

Baxter: There are no easy ones. The easiest today are all-cash deals, typically under $5 million or so, or larger deals with no financing contingency. We're still seeing deals on the high end being done with buyers that understand current capital markets and have realistic expectations. The more difficult are where the seller is looking backward and expecting value based on cap rates of a year ago. It gets back to that wide spread between bid and ask expectations.

GlobeSt.com: What are your growth plans?

Baxter: The company has experienced tremendous growth over the last five years. Stan and I are intent on two things: one, maintaining the specialization approach and two, accelerating our growth in that space.

So we are always challenging our status quo, looking for alternative ways to improve our services and improve our client coverage. To that end we are committed to expanding our offices with a regional office concept. The objective is to access a larger broker talent pool, as well as to get closer to our clients. We'll be very careful in doing this based on our past success. We want to make sure we maintain those things that have made us great, those strategies that we've relied on. You can definitely expect to see a regional office before the end of 2008.