GlobeSt.com: What are the team's goals at the new firm in the first year?

James: Our goal is to continue to expand our platform and solidify ourselves as a one of the top five net-lease brokerage firms in the country. As we continue to grow our thriving retail division, we plan to begin expanding our presence in the office, industrial and medical sectors. We have made considerable investments into our technology, allowing us to better collect and make use of market information. Our advisors and more importantly our clients have access to superior information and market research, allowing us to make more informed financial decisions together.

We have also made a commitment to collaboration, being the only firm, which has made it our policy to split fees 50 / 50 with all buyer's agents on our listings. We view buyer's brokers as our clients and welcome outside offers as they allow us to forge new, collaborative brokerage relationships, which in turn, enhances our service of our clients.

GlobeSt.com: What are some of the trends you think will dominate the net lease market this year?

James: Cap rates are already feeling the pressure of recent interest rate movements, and that trend will continue in the immediate future. Properties are sitting on the market longer and Sellers are being forced to re-adjust their expectations. When considering a sale and reviewing market data today, it is important to take into consideration the interest rate environment that existed at the time of previous sales, and to adjust pricing expectations to meet today's environment. A simple strategy of thoughtful pricing leads to more offers and increases the probability of executing a sale at the best pricing & terms.

In the retail sector, institutional buyers will continue to struggle to hit acquisition targets as their cost of capital increases and the list of credit-worthy retailers shrinks. We have already begun to observe extremely competitive bidding scenarios on portfolios that meet institutional requirements, while those that do not meet requirements are becoming more difficult sales.

By way of example, we recently ran a process on a large franchise QSR sale-leaseback portfolio in which the credit profile and prior comparable sales would suggest pricing in the 6.45%-6.65% range. The portfolio, which exceeded $100m in value, traded at a 6.25% cap rate with a total of 12 offers.

GlobeSt.com: How do you think net lease activity this year will compare to 2017?

James: We are projecting net-leased transaction volume to fall off by a total of 7.5% in 2018. As the bid-ask spread widens and sellers end up chasing the market, volume should be off by approximately 10% through the first two thirds of the year. As the summer comes to an end and rates increase an additional 25-50bps, sellers will become increasingly motivated to move their properties and the bid-ask spread will narrow. We believe this will lead to one of the most active 4th quarters in net-leased history.