LOS ANGELES-Risk tolerance is the key factor for finding what are considered “good” deals in the net lease industry, according to speakers on the Town Hall: State of the Industry panel at the Net Lease West 2013 conference. Panelists agreed that there is no such thing as ”one good deal.”

Rick Chichester, president and CEO of Faris Lee Investments, added that the two keys in determining a quality deal is understanding the client's risk tolerance and understanding the limits of yield. In the same conversation, Barclay G. Jones III, EVP of investments at iStar Financial Inc., agreed, adding that he believes the industry will continue to push against the limits of yield.

The panel discussion started with a review of the net lease industry over the past two years. Moderator Craig Tomlinson, senior director at Stan Johnson, provided a chart tracking transactions that showed that 4Q12 was a peak while 3Q13 is running just about average. Matt Tucker, managing director at the Gladstone Cos., explained that 4Q12 may just be an anomaly. At the end of the year, there was a push to close transactions, and he believes that is the reason for the spike. Additionally, he explained, there may be a similar push at the end of this year. Jones adds that funds raised this year outweigh transactions, which the chart did not cover.