LOS ANGELES—“At the end of the day, your lease is only as good as your tenant.” That is according to Gordon Whiting, managing director of Angelo, Gordon & Co., who served as a panelist at RealShare Net Lease West's Town Hall Power Panel yesterday.
According to Whiting, many of the problems in the net lease industry stem from poorly structured leases. “As an industry, we need to focus more on the underlying fundamentals of what we are selling.” And focusing on basic items, like financial statements, and a “no go dark” clause is important, he added.
Switching gears, when moderator Jeff Hughes, managing director of Stan Johnson, asked panelists about property types that are of interest, Gordon Whiting, managing director of Angelo, Gordon & Co., said he likes distribution houses and warehouses.
And for panelist Gino Sabatini, managing director of W.P. Carey, the type of property really varies by region. Like Whiting, he likes industrial as well as office and special use, but isn't bullish on retail in the US. “In Europe, we think retail is in a much better position. We have 30% to 40% retail exposure in Europe.” And with regards to build to suits, he says the premium isn't what it should be.
Harold Hofer, CEO of Rich Uncles, likes the $5-million to $25-million space, likes to buy all cash, and seeks office, industrial and retail properties. However, he noted that he is skittish on some retail, as many others are. “The mid-sized box, which has historically housed a Marshalls or Michaels for example, was overbuilt. A caution flag should be up on retail.”
Hofer explained that distribution facilities are where things are headed. “It is a great space and will continue to grow as e-commerce continues to flourish.”
When asked about a portfolio trade versus buying one at a time, Gordon said that he isn't so sure there is a huge premium for a portfolio trade when leased to different tenants. “With a multi-tenant portfolio, everyone prices the individual assets. At the end of the day, they go in and figure out where each asset needs to be. Larger bite sizes tend to get people more excited, but it lowers the pool of potential buyers.”
Sabatini previously told GlobeSt.com that it is a good time to be a seller. He said that low cap rates and low interest rates, which are helping to drive demand, are creating a perfect storm for the net lease market. Sabatini expects the market to remain attractive for sellers through 2017. “As long as rates remain low and the alternative for those seeking income is not available, it will remain a seller's market,” he told GlobeSt.com. “There are all sorts of demographic groups that are looking for a stream of income, and we see a demand for that.”
Check back with GlobeSt.com in the next day or so for more from the half-day RealShare net lease event.
LOS ANGELES—“At the end of the day, your lease is only as good as your tenant.” That is according to Gordon Whiting, managing director of
According to Whiting, many of the problems in the net lease industry stem from poorly structured leases. “As an industry, we need to focus more on the underlying fundamentals of what we are selling.” And focusing on basic items, like financial statements, and a “no go dark” clause is important, he added.
Switching gears, when moderator Jeff Hughes, managing director of Stan Johnson, asked panelists about property types that are of interest, Gordon Whiting, managing director of
And for panelist Gino Sabatini, managing director of W.P. Carey, the type of property really varies by region. Like Whiting, he likes industrial as well as office and special use, but isn't bullish on retail in the US. “In Europe, we think retail is in a much better position. We have 30% to 40% retail exposure in Europe.” And with regards to build to suits, he says the premium isn't what it should be.
Harold Hofer, CEO of Rich Uncles, likes the $5-million to $25-million space, likes to buy all cash, and seeks office, industrial and retail properties. However, he noted that he is skittish on some retail, as many others are. “The mid-sized box, which has historically housed a Marshalls or Michaels for example, was overbuilt. A caution flag should be up on retail.”
Hofer explained that distribution facilities are where things are headed. “It is a great space and will continue to grow as e-commerce continues to flourish.”
When asked about a portfolio trade versus buying one at a time, Gordon said that he isn't so sure there is a huge premium for a portfolio trade when leased to different tenants. “With a multi-tenant portfolio, everyone prices the individual assets. At the end of the day, they go in and figure out where each asset needs to be. Larger bite sizes tend to get people more excited, but it lowers the pool of potential buyers.”
Sabatini previously told GlobeSt.com that it is a good time to be a seller. He said that low cap rates and low interest rates, which are helping to drive demand, are creating a perfect storm for the net lease market. Sabatini expects the market to remain attractive for sellers through 2017. “As long as rates remain low and the alternative for those seeking income is not available, it will remain a seller's market,” he told GlobeSt.com. “There are all sorts of demographic groups that are looking for a stream of income, and we see a demand for that.”
Check back with GlobeSt.com in the next day or so for more from the half-day RealShare net lease 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.
