In the world of corporate real estate, there's an ongoing need to do deals. “Every year we do a facilities survey and then we meet with all the vice presidents in charge of the various facilities and we develop a plan for the year, though these are three-year rolling plans,” says Rick Frazier, director of real estate, facilities corporate real estate at Kaman Industrial Technologies Corp. until two weeks ago. “We typically don't like to own real estate,” he continued, implying that the company—and maybe similar end-users—are often looking to lease space or dump assets.

Added Richard Sahakian, SVP, real estate transaction management, T.D. Bank, “Weare basically growing bank and acquiring space as necessary.” Then he revealed information that likely was welcome news to brokers. “We haven't been much of a player in lease-backs, we prefer to own. I may be of interest to you as a future owner.”

The way in which execution of deals takes place can vary widely. “We see the role of individual investors continuing, but it's all about having multiple sources of capital,” said Chad Edmonson, executive director, W.P. Carey. But Ledy is relying more on institutions. “Institutions are looking for cash; we look for good quality deals with 10-12 IRRs and we spend a lot of time on exit strategy.”

Added Fort Parker, VP, Angelo, Gordon & Co., “We're set up to do sub-investment grade deals so from a pricing perspective, we do deals with low teen targets to high, depending on the IRRs and mix of credit.”

Some deals are coming from past errors, noted Ledy. “We had a situation where the deal was leveraged to 90% with two years left on deal and they couldn't refinance. We were able to put in capital to entice the tenant to stay,” he said. “There are complications that create opportunities.”

Corporations seem to be agnostic when it comes to deal type. “On the retail side of our house, we do ground leases a lot,” said Sahakian. “We typically are opening 36-40 stores a year, ground is our preferered lease type.” Triple net lease is appealing too, with a few term tweaks, he says. “I think it's fair enough for a landlord, on a triple net lease, to expect us to cover expenses,” admitted Sahakian. “But in a primary city, we'd expect the landlord to shoulder those costs.”

Added Frazier, “If we're going to sign a five-, seven- or even 10-year deal, at below market rate, I would expect things like the air conditioning to have a 10-year life and for all those mechanical costs to be included in the deal. We want to know what our costs are going to be going forward, we don't want to be surprised,” he said. “Otherwise charges can add up to beyond the net rent.”