(This guest blog from GlobeSt.com's Natalie Dolce is part of our lead-up coverage to ICSC Western States.)
LOS ANGELES—“The net lease retail market in the west is robust, with demand exceeding supply by four times or higher.” That is according to locally based Sam Alison, Stan Johnson Co. regional director, who recently chatted with GlobeSt.com in preparation for ICSC Western States.
GlobeSt.com: What makes net lease retail properties on the West Coast attractive to investors in today's market?
Sam Alison: Over the past eight years during the recession and ongoing recovery, real estate has outperformed the volatile stock market and paltry returns from fixed income securities. Real estate, particularly net lease properties, have delivered consistent cash-on-cash returns to investors throughout the slowdown and recession of 2006-2011 and the return to economic stability over the past three years. Because of the difficulty for development, forecasts show sustained growth in rental rates in most Western markets amid growing tenant demand for new stores. Well-located properties with steady income in markets with rental rate growth give investors secure returns and future value.
GlobeSt.com: How will the net lease retail market on the West Coast in 2015 differ from 2014?
Alison: Currently, there are more single tenant net lease retail properties under development than at any time over the past seven years. This will provide a growing supply of new product with long-term leases. The new supply will sell quickly as will existing properties because the newly built supply is not nearly enough to meet the pent-up demand. We anticipate the 2015 market will continue being robust for newly-built stores with long term leases and most well-located existing properties.
GlobeSt.com: What is key for an investor to be selected and close on a net lease retail property in today's environment?
Alison: Buyers should determine their risk and return profile before making offers on properties then make credible offers, show the money, move quickly through diligence and close. Non-credible offers, false starts, and closing failure damage a buyer's reputation, making it more difficult to be selected next time around. There are a lot of properties on the market and the selling process is efficient if handled by reputable experienced sellers and brokers.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
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.
