Hanley Investment Group Pulls Off Record-Breaking 2020

The pandemic isn’t stopping retail brokerage firm Hanley Investment Group. Despite the pandemic, the firm had a record-breaking year in 2020 with a total sales volume in excess of $703 million, one of the highest in the company’s history.

“Despite the effects of COVID, record-breaking cap rates were still being achieved in 2020, as buyer demand outpaced the supply of best-in-class retail investments,” Ed Hanley, president of Hanley Investment Group, tells GlobeSt.com. “We closed 139 transactions in 26 different states in 2020, ranging from single-tenant properties to multi-tenant retail properties and anchored-shopping centers.”

The firm’s pool of clients also stayed the same, and included the usual broad mix of everything from institutions to private players and national retail names. “We worked with a variety of buyers and sellers including publicly traded real estate investment trusts, developers, family trusts, partnerships and private investors. We also represented national tenants such as RH (also known as Restoration Hardware) again this year in the marketing and sale of select real estate as well as other national and regional chains,” says Hanley.

The pandemic also accelerated existing trends. This was true in many ways for retail, but more specifically, the market change drove capital outside of California. “Similar to 2019, we saw California capital leave the state in 2020 in search of better yields and/or a greater selection of inventory,” says Hanley. “More than half of all of our buyers were based in California.” The transaction activity was also driven by 1031 exchanges, which carried on despite the pandemic. “A lot of this activity came from 1031 exchange buyers selling multi-family property in California to avoid certain laws and mandates that made it difficult for them to achieve their desired returns.”

California buyers made a splash in outside markets, coming to the deal table with aggressive offers and strong capital that promised ability to close. “The local developers and sellers in key markets outside of California saw an unprecedented number of buyers from California who were willing to pay a premium above local buyers for quality net leased real estate,” says Hanley.

As a result, Hanley was able to secure record cap rates in secondary markets outside of California. Hanley says, “We achieved record cap rates in markets like Denver, Seattle, Salt Lake City, Las Vegas, Phoenix, Dallas, Austin, Houston, Montana, Minneapolis, Orlando, Jacksonville and Kansas City, predominantly from multifamily sellers seeking passive investments outside California.”