Single Tenant Insider
|October/ November 2016
IN THIS ISSUE:
• Market Update
• Industry Soundbites
• Ask Nancy
• Recent Sales
• Acquisition Opportunities
• Properties Wanted
Nancy Miller, CCIM
Net Lease Investments
Bull Realty, Inc.
404-876-1640 x 118
- $3.1 million/5.5% cap
- 8+ years remaining on a 20 year NNN lease with options
- Corporate guaranteed
- $1,391,900/7.0% cap
- 12 yrs remaining on 15 year NNN lease with options
East Point, GA
- $2.4 million/5.8% cap
- 14+ yrs remaining on 15 year NNN lease with options
- $1.029 million/7.9% cap
- 6 years remaining on a 10 yr NN lease with options
Union City, GA
- $795K/7.3% cap rate before precentage rent
- 5 years remaining on extended NN lease with options
♦ Single Tenant Properties - $2.5-$4M
- Larger metros
- 10+ years
- 6%+ cap
Would you like to see what your property would bring in today's market? CLICK HERE
Nancy Miller, President of National Net Lease Investments with Bull Realty and Scott Lindstrom, Director of Real Estate and Development with Garrard Group joined Michael in Studio One to share some single tenant property investment tips.
2015 vs. 2016 Net Lease Trends "By the Numbers"
CoStar compared transactions, deal size, cap rates, and average price/square foot from 2015 to 2016 YTD for the most common price range of single tenant retail NNN deals - between $1,000,000 -$3,000,000. The chart below sums it up – most notably – prices are up from $1.8M to $1.9M. Correspondingly, cap rates are also lower – down from 6.5% to 6.3%. And if 2016 ends at the same rate, total transactions will be less than 1100 – significantly fewer than the 1434 in 2015. What may be the cause of this, if the numbers hold? Decreased supply?
Triple Net REIT Roundup - Morgan Stanley Net Lease Survey says "Broker Sentiment Remains Muted but Overall Environment Still Supportive" The results of Morgan Stanley’s quarterly AlphaWise 'Triple Net REIT Roundup," which gets a market view from 25 national single tenant net lease brokers (Bull Realty's Nancy Miller among them), says that "triple nets are still the best performing REIT subsector YTD - up over 20%, as the companies have benefited from a flight to safety and the low rate environment." Over 55% of brokers rank supply/demand imbalance as the top factor to impact deal volume for the remainder of 2016. Brokers were less concerned about asset quality and interest rates...Read more
♦ Dollar General hangs help wanted sign According to Seeking Alpha, DG plans to hire 10,000 new employees to fill current openings and planned store openings...Read more
♦ Jimmy John's One of 3 Brands Sold This Week Atlanta-based Roark Capital acquired a majority stake in Jimmy Johns, putting the sandwich shop in a list with Auntie Anne's, Cinnabon, and Schlotzsky's, according to QSR Magazine...Read more
♦ Once jobless and uncounted, eager workers could slow Fed rate hike According to Reuters, workers are moving from outside the labor force directly into jobs at a record pace which could influence the pace of interest rate increases...Read more
♦ Advance Monthly Retail Inventories The U.S. Census Bureau reported that advance estimates of U.S. retail and food services sales for September, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $459.8 billion, 2.7% above September 2015...Read more
|Coming Next Month...Highlights of the QSR 2016 Drive-Thru Study
Email YOUR SINGLE TENANT NET LEASE QUESTIONS to Nancy. She will answer them individually or publish the answer in an upcoming newsletter, leaving you anonymous!
"With so many buyers vying for quality single tenant properties, what advice do you have so that I can be put at the top of the list over other buyers?" - Rich in Brooklyn, NY
That is a great question! Three things are making it more difficult for single tenant buyers to be the “bride” and not the “bridesmaid!” First, there is limited supply of good single tenant properties. Second, REIT’s are in the market and are increasing pressure on availability due to their bulk buying power. Third, there is an abundance of 1031 investors who are willing to pay lower cap rates due to the short supply of single tenant properties. The result of all of this - Sellers realize that they can be more picky! Here are some tips to increase the likelihood that you will be selected as the “bride” and not the "bridesmaid"!
- Ensure that your offer is all cash even if you intend to do financing. Sellers view financing as risky and will choose cash buyers over those doing financing.
- Keep your due diligence timeframes as tight as possible and closing as quick as possible. Sellers will sometimes take a lower offer and quicker closing.
- Demonstrate your financial capability to close in the form of liquidity to purchase the property while demonstrating your experience as a net lease property owner. Sellers do not want to waste time with unqualified buyers.
- Work with an experienced net lease broker who can articulate your capabilities over another buyer. We represent net lease buyers every day and can increase your likelihood of being the “bride!” Happy Hunting! - Nancy
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