Part 2 of 2
LOS ANGELES—Markets that garner the greatest demand are typically coastal gateway markets such as Los Angeles, San Francisco, New York City, Miami, and Washington D.C. But there are many other markets getting more and more interested. That is according to Matthew Berres, a VP at JLL.
Denver, he says, “is garnering interest due to its employment boom and the influx of millennials who plan to stay long-term.” And Texas, he tells GlobeSt.com, has always been on investors radar due to its favorable business environment and ability to whether the recession.
Additional markets on investors' radar screens, according to Berres, include Salt Lake City, Seattle, and Phoenix. And California's markets will typically be favorites among investors due to the high barriers to entry, he adds.
When asked about an increase in foreign investment into the net lease sector, he says that “Many European and Asian investors view the US as a safe haven for capital due to the overall economic strength, appreciation levels and transparency. The uncertainty facing China's economy and the turmoil in other European markets add to the appeal of investing in the US.”
Switching gears, GlobeSt.com then asked about the significant uptick in retail sale-leasebacks and the strategy behind those plays. “The rise in retail sale leasebacks correlates directly to the top line revenue growth among retail concepts,” Berres says. “Given the historically high valuations on the real estate side combined with the record low cap rate environment, retailers with attractive returns are able to pay down debt, acquire other companies or build new assets.
As for what the future holds for the net lease sector? “Last year we saw transaction volume at $50 billion and this year, JLL is forecasting volumes to hit around $60 billion,” he says. “New capital is coming to the market, financing is accretive and the strength of the sector should continue to grow.”
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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.
