NEW ORLEANS–As GlobeSt.com exclusively reported at the end of March, a Connecticut investor paid $55 million for the land and building on which a Home Depot sits. Industry executives are saying this is the largest single-tenant Home Depot sale ever. GlobeSt.com caught up with Robert Horvath from Marcus & Millichap who represented buyer Kleban Holdings in the transaction, to get a feel for the local New Orleans market.
GlobeSt.com: What are some major drivers of the market today?
Horvath: The major drivers include:
- A supply and demand imbalance, with not enough product in the marketplace to support the capital.
- All buyer pools are active in the marketplace – private, 1031 capital, institutional, etc.
- Low interest rate environment.
- Lack of new net lease inventory coming to market.
GlobeSt.com: How would you summarize the New Orleans market today?
Horvath: Overall the market is very good.
GlobeSt.com: What would you say will be some of the major market trends in 2014?
Horvath: Major market trends for the area include:
- Net lease market will remain active.
- CAP rates will remain compressed.
- Exchange market will continue to help drive pricing.
GlobeSt.com: You recently brokered a $55 million Home Depot site sale, what was it about this property that created such a large sale price?
Horvath: This was a highly desirable retail area that Home Depot had significant confidence in, supported by the rent that they paid for the location.
GlobeSt.com: Do you see this sale as indicative of where the New Orleans market is headed?
Horvath: No, this was a net lease asset that happened to be in New Orleans; the retail trade area increased the investor interest.
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