Cline: “[Buyers are] rightfully scrutinizing tenants' credit, brand and concepts more closely than before.”NEWPORT BEACH, CA—Investors are now looking for sustainable income backed by brands and tenants exhibiting business models that are complementary to e-commerce, versus in the direct path of e-commerce, SRS Real Estate Partners' Greg Cline tells GlobeSt.com. Cline recently joined the firm as VP in the National Net Lease Group's Newport Beach office.
Cline has more than 40 years of experience in commercial real estate, at companies including CBRE. In his new role, he will focus on buyer representation and 1031 exchanges and launch a national buyer representation practice within the NNLG. Since the NNLG has historically focused mostly on seller representation, Cline will aim to strengthen the firm's buyer services and connect buyers to the national inventory that SRS represents.
We spoke with Cline about his new position with SRS and his view of the 1031 exchange market.
GlobeSt.com: What are you most looking forward to accomplishing in your new role with SRS Real Estate Partners?
Cline: I believe that I can add value to SRS and our clients since I'm filling a void that does not exist within the company today. Buyers will know they will be previewing all of SRS's on- and off-market inventory, currently spanning more than 30 states and in excess of $1 billion in available property, and that they will also see other properties from the brokerage community. I'm also pleased to be aligning with a firm that is full service and has long established relationships with tenant representation. My clients are primarily long-term investors, and with the changing landscape as it relates to retail, having access to the retailer will be hugely valuable to my practice.
GlobeSt.com: How do you view the current state of the 1031 exchange market?
Cline: Robust—there are multiple offers for quality assets. There are many investors doing estate planning and moving their equities into net-leased investments so there is no management or financial obligations for the inheriting generation. This is leading to continued 1031 exchange activity, along with continued strong transactional volume in the multifamily and industrial sectors, along with land sales.
GlobeSt.com: Where do you think the 1031 exchange market is heading?
Cline: It will continue to be active since real estate investors of all sizes heavily utilize this section of the tax code. We'll be monitoring any proposed changes to the 1031 and treatment of gains and depreciation expense. The current sentiment is that the code will remain intact.
GlobeSt.com: How have buyers' needs changed, and how are they being met?
Cline: Buyers are looking for “no headaches” with a guaranteed income, and yes, their needs are getting met for the most part. However, investors are also looking for sustainable income backed by brands and tenants exhibiting business models that are complementary to e-commerce, versus in the direct path of e-commerce. This is a shift in buyers' needs; they're rightfully scrutinizing tenants' credit, brand and concepts more closely than before. This is resulting in greater exchange demand for certain product types, such as dining and entertainment uses, and less demand for big-box retail, clothing, soft goods and sporting goods.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
