Heading into 2023, corporate tenants in net lease transactions are looking for a "true long-term partner," says one industry insider.
"We're looking for a partner who is supporting our business and offering more than just a property to lease," says Sam Harmelech, VP of Real Estate and Associate General Counsel at Verano, speaking to GlobeSt in advance of our net lease conference this spring.
Harmelech – who will join other corporate tenants in a panel discussion on what tenants value in net lease partnerships – says investment in tenants' buildouts through a tenant improvement package and other key incentives is critical.
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"We're looking for someone that will be equitable with regard to sharing maintenance responsibilities, as well as working with us on contingencies/free rent for zoning and construction permits to ensure we can actually operate the business there and get open," he says.
Harmelech says he expects new store openings to slow in the overall retail sector in 2023, and that rents will either plateau or drop while cap rates continue to rise.
"As the economy starts to slow and the Fed tries to keep inflation under wraps, we will all be monitoring consumer trends as that will impact the pace of new store openings, where we are opening new locations and where money is spent to improve existing store performance," he says. "We need to be conscious of the expected slowdown in 2023."
Check back soon for more insights from Sam Harmelech and other panelists at GlobeSt's upcoming spring net lease conference.
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