NEW YORK CITY—It's been a busy year for retail net lease, not the least because of a favorable debt market and high-demand for the product, according to Camille Renshaw, CCIM. GlobeSt.com met up with the director in the New York office of Stan Johnson Co. before the ICSC New York National Deal Making conference to get the firm's impression.
In this EXCLUSIVE discussion touching on sale-leasebacks, 1031 exchanges and the reasons why 2015 might present a very similar picture.
GlobeSt.com: How would you describe the state of the sale-leasebacks in the net lease retail market on the East Coast and throughout the U.S?
Camille Renshaw, CCIM: The retail sale-leaseback market is very busy currently throughout the U.S., especially in the middle markets. All sectors are leveraging this financial tool for growth and alleviation of debt.
GlobeSt.com: How is the state of the financing market impacting the sale of net lease retail properties?
Renshaw: Low mortgage rates are encouraging transactions in all sectors, which is fostering 1031 exchanges. This in turn puts huge pressure on the net lease market as exchangers hunt for 45 days for simple long-term credit deals that can be easily understood and contracted.
GlobeSt.com: What is the climate for institutional investors when it comes to net lease retail properties?
Renshaw: Institutional investors are priced out of product below $10 million if the deal has good real estate fundamentals, long term, and investment grade credit. In the larger listings, they have less competition from exchangers and family office money.
GlobeSt.com: What advice do you have for investors of net lease retail properties as we head into 2015?
Renshaw: Look for a deal differentiator – pursue shorter term or some other point of difference so buyers and brokers think to call you.
GlobeSt.com: What are your expectations for 2015 net lease market?
Renshaw: It will be very similar to 2014. Cap rates will remain stable and low, and financing will be available in abundance and low rates. There will continue to be more demand than supply. A few large retail sale leaseback portfolio deals will likely make the news again, as retailers capitalize on compressed pricing.
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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.
