Although Aldi is a private company, there is great demand for their free-standing stores as net lease investments. The properties are well located on main commercial thoroughfare. Aldi net leases properties provide a long-term investment with no property management responsibilities in the form of a 15 to 20-year primary term NNN ground lease. The lease terms typically call for 5% increases in rent every 5 years.
The company plans to open 650 more stores in the U.S. by 2018, increasing its store count by 50% as it expands across the nation. Aldi is seeking to become the country's biggest discount supermarket chain by store count. The company's target shows how grocers at the high and low ends of the market have continued to grow while those in the middle have struggled.
Pros:
- Long term leases
- Lease usually includes rent increases
- Store sales appear to be growing at as healthy rate
Cons:
- Private Company
- Future competition from Lidl
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
