LOS ANGELES—“Trends are contractual in net lease.” That is according to William Lenehan, CEO of Four Corners Property Trust.
Lehehan served as the keynote speaker at RealShare Net Lease West conference on Wednesday and explained that Four Corners Property Trust seeks to acquire nationally recognized branded restaurants that are well located with creditworthy lease guarantors. He also said they look to purchase assets only when accretive to cost of capital.
Lehehan said that, in terms of geography, it is very hard to grow west of Texas. “It is very competitive. We love to grow in the mountain states where you get a bit better value, but it is a challenge.”
And caution is warranted in the net lease market, Lenehan continued. When discussing risk in the space, he said that there are some people reaching for certain brands and are taking more of a risk.
“When we look at brands, we aren't just searching for the most productive brand. Sometimes reaching for that trophy brand is pretty dangerous.” He continued to note that as you buy lower cap rate stuff, higher quality trophy assets, the change in interest rates is even more dangerous.
“Some of the assets that are perceived as trophy assets today are actually the most risky,” he said. “We try to be cautious and selective. We try out best to reject the idea that because someone else purchased a Walgreens at a 5 cap, we should be excited to buy it at a 5.1.”
When asked about his biggest concern on the operational side of the business, he said it is the risk of losing the people, the acquisition team that he has recruited and trained. “We have such a small team,” he said. “I spend a lot of time and effort training and assembling them.”
Check back with GlobeSt.com in the next day or so for more from the half-day RealShare Net Lease West event.
LOS ANGELES—“Trends are contractual in net lease.” That is according to William Lenehan, CEO of Four Corners Property Trust.
Lehehan served as the keynote speaker at RealShare Net Lease West conference on Wednesday and explained that Four Corners Property Trust seeks to acquire nationally recognized branded restaurants that are well located with creditworthy lease guarantors. He also said they look to purchase assets only when accretive to cost of capital.
Lehehan said that, in terms of geography, it is very hard to grow west of Texas. “It is very competitive. We love to grow in the mountain states where you get a bit better value, but it is a challenge.”
And caution is warranted in the net lease market, Lenehan continued. When discussing risk in the space, he said that there are some people reaching for certain brands and are taking more of a risk.
“When we look at brands, we aren't just searching for the most productive brand. Sometimes reaching for that trophy brand is pretty dangerous.” He continued to note that as you buy lower cap rate stuff, higher quality trophy assets, the change in interest rates is even more dangerous.
“Some of the assets that are perceived as trophy assets today are actually the most risky,” he said. “We try to be cautious and selective. We try out best to reject the idea that because someone else purchased a Walgreens at a 5 cap, we should be excited to buy it at a 5.1.”
When asked about his biggest concern on the operational side of the business, he said it is the risk of losing the people, the acquisition team that he has recruited and trained. “We have such a small team,” he said. “I spend a lot of time and effort training and assembling them.”
Check back with GlobeSt.com in the next day or so for more from the half-day RealShare Net Lease West event.
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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.
