LOS ANGELES—“I have looked at corporate campuses that have 18- to 24-month build time but certainly there are interest rate risks.” That is according to Zachary Pasanen, a VP at W. P. Carey.
Pasanen served on a panel at the recent RealShare Net Lease West conference about opportunities in sale-leasebacks and build-to-suits. Overall, panelists agreed they are “selective” when it comes to build-to-suits.
“We have to protect our downside, which is why we don't do a lot of build-to-suits at low yields going in,” Pasanen said. “That is why we do deals that are higher yielding… You benefit from that in the long term. We are also very selective at looking at build-to-suit rents versus market rents.”
When moderator Douglas M. Longyear, managing director of capital markets for the net lease group at Cushman & Wakefield, talked about sale-leasebacks, he said that often times, a company is looking for what they are carrying the real estate on their books at and aren't looking for a gain. “Often times, sale-leasebacks can be below replacement costs, but in a build-to-suit, often times the developer is trying to get some profit which they are certainly entitled to.”
Robert G. Vanecko, managing principal of Brennan Investment Group, said that whatever the deal, his firm likes the kind of deals where they can get in at an attractive basis and keep the rent low for the tenant and not just max the proceeds.
As for what types of tenants and what types of qualitative things Vanecko looks for? He said that he is attracted to companies that have been in business for a long time and that have made it through a number of cycles. “We like companies that have a diversified customer base with businesses that seem growing but stable. We like businesses that are not going to become obsolete in a few years (which is hard to judge) and companies that have a niche and a value-add product that isn't just a commodity that someone will figure out how to make cheaper.”
LOS ANGELES—“I have looked at corporate campuses that have 18- to 24-month build time but certainly there are interest rate risks.” That is according to Zachary Pasanen, a VP at W. P. Carey.
Pasanen served on a panel at the recent RealShare Net Lease West conference about opportunities in sale-leasebacks and build-to-suits. Overall, panelists agreed they are “selective” when it comes to build-to-suits.
“We have to protect our downside, which is why we don't do a lot of build-to-suits at low yields going in,” Pasanen said. “That is why we do deals that are higher yielding… You benefit from that in the long term. We are also very selective at looking at build-to-suit rents versus market rents.”
When moderator Douglas M. Longyear, managing director of capital markets for the net lease group at Cushman & Wakefield, talked about sale-leasebacks, he said that often times, a company is looking for what they are carrying the real estate on their books at and aren't looking for a gain. “Often times, sale-leasebacks can be below replacement costs, but in a build-to-suit, often times the developer is trying to get some profit which they are certainly entitled to.”
Robert G. Vanecko, managing principal of Brennan Investment Group, said that whatever the deal, his firm likes the kind of deals where they can get in at an attractive basis and keep the rent low for the tenant and not just max the proceeds.
As for what types of tenants and what types of qualitative things Vanecko looks for? He said that he is attracted to companies that have been in business for a long time and that have made it through a number of cycles. “We like companies that have a diversified customer base with businesses that seem growing but stable. We like businesses that are not going to become obsolete in a few years (which is hard to judge) and companies that have a niche and a value-add product that isn't just a commodity that someone will figure out how to make cheaper.”
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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.
