CHICAGO—There continues to be a rapid flow of capital into the net lease retail space. So says Stan Johnson's Brandon Duff when chatting with GlobeSt.com in preparation for the upcoming ICSC RECon conference in Las Vegas. The locally based regional director tells GlobeSt.com that nontraditional real estate investors are looking in this space, and many financing options are available.
GlobeSt.com: What makes net lease retail properties attractive to investors in today's market?
Brandon Duff: Net lease properties are attractive to investors for a variety of reasons. Yes, in today's supply constrained marketplace we are seeing continued downward pressure on cap rates. Yet, the yields for net lease properties are still attractive when compared to alternative investments and they come with the tax advantages. Retail properties specifically tend to have many financing options available and often come with little (if any) landlord management responsibility.
GlobeSt.com: How has the net lease retail market changed over the past few years?
Duff: For us, we have seen several changes take place the last few years. There continues to be a rapid flow of capital into the space. Especially from what we call “nontraditional real estate investors.” There has been a lot of money sitting on the sidelines starving for yield now looking for a home. Some other changes include a growing number of financing options and numerous new tenant expansions starting to take place.
GlobeSt.com: Who hold the upper hand with net lease retail properties—buyers or sellers? Why?
Duff: It is hard to not be a seller in today's marketplace. We are seeing cap rates at historical lows, buyers fighting over acquisitions, and high probability of buyer execution. If your plan is to sell any time in the next few years I can't think of a better time than now to be a seller.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
