NNN Leased Real Estate
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Schorsch Stepping Down as ARCP CEO

Schorsch Stepping Down as ARCP CEO | NNN Leased Real Estate | Scoop.it
NEW YORK CITY The net lease REITs chairman and CEO made the announcement in a letter to shareholders Friday, while also outlining a number of other changes intended to maximize long-term value.
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Morrison Foerster Lawyer Sees REITs Narrowing Focus | REIT.com

Morrison Foerster Lawyer Sees REITs Narrowing Focus | REIT.com | NNN Leased Real Estate | Scoop.it
Morrison Foerster’s John Good says SEC continuing to examine financial metrics in REIT filings.
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KLNB's Net Lease Group Launches with $100M Pipeline

KLNB's Net Lease Group Launches with $100M Pipeline | NNN Leased Real Estate | Scoop.it
KLNB Retail has launch of a Single Tenant Net Lease Group, which will be managed by industry veterans Peter Snell, who has been named Director, and Rich Sillery, who will be an Investment Associate.
David Busse's insight:

In yet another testimony to the demand for NNN leased properties, KLNB Retail has opened a new STNL Group. "Frothy" is the word used by Director and former M&M broker, Peter Snell, to describe the activity in the retail-restaurant-bank segment of the net lease market.

As the real estate market emerges from the "great recession," owning NNN properties feels a lot less risky and is far less time intensive than dealing with the "value add" properties which have great capital gains potential. Achieving those gains, however, requires time. knowledge, and resources that are not available to the vast majority of (relatively) small investors.

There is some downside potential to the NNN market. We will examine some of these risks in later posts.  

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Rolling Up REITs: Private Equity, Non-Listed Firms Merging to Gain Scale and Entry to Public Markets - CoStar Group

Rolling Up REITs: Private Equity, Non-Listed Firms Merging to Gain Scale and Entry to Public Markets - CoStar Group | NNN Leased Real Estate | Scoop.it
Call it the Great REIT Roll-up of 2013. This year's crop of REIT mergers, initial public offerings and conversions includes a number of large deals in which companies have rolled up funds and non-traded REITs into publicly traded...
David Busse's insight:

Valuable insight into real estate activity in the public stock markets, lead, of course, by the extensive roll ups of private NNN REIT's into publicly traded REIT's. This activity gives important liquidity to investors in the private entities and increases "assets under management" for the public REIT's.

 

Next, we will want to see how they perform as interest rates go up and there is pressure for cap rates to take a corresponding downtick. Various discussion groups and property listings say the downtick has not yet started, but it is an important consideration for NNN investors.

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The rise of the one-tenant REIT

The rise of the one-tenant REIT | NNN Leased Real Estate | Scoop.it
It sounds like a disaster if the tenant goes bankrupt, but the retailers' strategy of turning their property into publicly traded entities has become the flavour of the month in the REIT world
David Busse's insight:

NIce commentary on the "new wave" in NNN real estate...Single Tenant REIT's. Industry and Operator Diversity vs. Geographic Diversity and Credit Quality.

 

What do you think? Should the cap rates on a Single Tenant portfolio/REIT be lower or higher than that of a Diversified portfolio with similar geographic diversification, credit quality, and lease term? How much higher or lower? 

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5 Surefire Ways to Tank a Pitch

What not to do: Your helpful guide to losing interest and alienating venture capitalists.
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David Busse's comment, August 7, 2013 4:06 PM
this is a valuable commentary on what not to do (and how not to do it) for people raising funds for any project.
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Marcus & Millichap’s Commercial Real Estate Videos - Hessam Nadji

Bloomberg TV recently featured Marcus & Millichap's Hessam Nadji
David Busse's insight:

An excellent overview of the state of the national commercial real estate investment market today. Short but well worth watching...db

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Interest Rate Volatility Causes Uncertainty in Net Lease Market | Net ...

Interest Rate Volatility Causes Uncertainty in Net Lease Market | Net ... | NNN Leased Real Estate | Scoop.it
Cap rates for single tenant properties remained near historic lows for retail, office and industrial sectors in the second quarter of 2013 due to the continued high demand for this asset class. ...
David Busse's insight:

This is a great summary of what has been happening in the NNN leased market space during the second quarter of 2013.

 

The interesting thing to watch for will be the potential reversal of cap rates to reflect the second quarter increase in interest rates. It should take several months for cap rates to change from falling to rising, even if interest rates continue to increase (or even to hold steady) This month's upward move of one full per cent (or about 30%) for the thirty year treasury bond tells us that financing for NNN credit tenant deals is going to get more expensive.

 

For a while the all cash buyers can keep buying at the current asking prices, but the leveraged buyers will be negotiating hard to get higher cap rates and lower prices. Gradually, I'm guessing over about six months, the pricing will respond to the impact of interest rates, and if rates keep going up there could be some serious deterioration in the values of existing NNN lease properties.

 

In a rising rate environment investors must be prepared to hold on for the long term unless scheduled rent escalations are sufficient to move the cap rate up to the then current market. 

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Wells Net Lease Group Announces VP to Head Westward Expansion

NAPLES, Fla., July 8, 2013 /PRNewswire/ – Wells Net Lease Group (WNL), a commercial real estate brokerage firm specializing in net lease properties, has named Harjot Gill Vice President of Investments and has put him in charge of the company's West...
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Institutional Investors Look To Net-Leased Property | Stan Johnson ...

Institutional Investors Look To Net-Leased Property | Stan Johnson ... | NNN Leased Real Estate | Scoop.it
In these circumstances, yield-driven investors with good access to capital are more likely to put their money into single-tenant, net-leased real estate. Such assets generally provide a ...
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The Boulder Group Arranges Sale of a Single Tenant Walgreens Property in ... - RealEstateRama (press release)

The Boulder Group Arranges Sale of a Single Tenant Walgreens Property in ... - RealEstateRama (press release) | NNN Leased Real Estate | Scoop.it
The Boulder Group Arranges Sale of a Single Tenant Walgreens Property in ...
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Manhattan Office Rents Rise 5% on Jump in High-End Leases - Bloomberg

Manhattan Office Rents Rise 5% on Jump in High-End Leases - Bloomberg | NNN Leased Real Estate | Scoop.it
Manhattan Office Rents Rise 5% on Jump in High-End Leases Bloomberg Manhattan's office market is returning to health almost five years after the credit crisis caused leasing to stall and rents to plummet more than 26 percent between mid-2008 and...
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Cornerstone Core Properties REIT, Inc. Acquires Assisted Living Facility - Fort Mills Times

Cornerstone Core Properties REIT, Inc. Acquires Assisted Living Facility Fort Mills Times The facility has been triple-net leased to an affiliate of Meridian Senior Living, LLC (“Meridian”), the new operator of the facility, pursuant to a...
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Upward Adjustment in Cap Rates?

Upward Adjustment in Cap Rates? | NNN Leased Real Estate | Scoop.it
In this EXCLUSIVE Q&A, GlobeSt.com chats with two CBRE executives on what happens when over-abundance of capital combines with a lack of inventory and what the future holds.
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Just What the Doctor Ordered: New 'Medtail’ Tenants Filling Vacant Shopping Center Space

Just What the Doctor Ordered: New 'Medtail’ Tenants Filling Vacant Shopping Center Space | NNN Leased Real Estate | Scoop.it
With the era of retail medicine fast approaching, health care providers and medical specialists are increasingly opening facilities in shopping centers, which offer an attractive combination of affordable space, good patient access and ample parking.
David Busse's insight:

This exemplifies the Great Merger of 21st Century "retail" real estate.... the realization by the hospital/healthcare industry that is should get "where the people are" in order to survive and thrive in challenging times. What better places than in the retail centers that are gasping for the "oxygen" of new tenants and the black ink of positive cash flow.

 

When the pioneers a few decades ago started creating surgery centers and "off campus" walk-in and emergency treatment facilities, few of them realized that we would reach a time when hospitals themselves would be reducing acute care beds and branching out into the "burbs" And now the healthcare systems are opening new facilities that cost less to operate and to use in places where they never dreamed of being.

 

This is beautiful testimony to the versatility of real estate and the creativity of the people who use it to provide goods and services.

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American Realty Capital Cuts Value of Offer for Non-listed REIT

American Realty Capital Cuts Value of Offer for Non-listed REIT | NNN Leased Real Estate | Scoop.it
American Realty Capital Properties Inc. changed the terms of its bid for American Realty Capital Trust IV, a nonlisted real estate investment trust under the same management company, to value the company at about $3 billion.
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How Steve Jobs Got ATT To Share Revenue

How Steve Jobs Got ATT To Share Revenue | NNN Leased Real Estate | Scoop.it
FRANKFURT AM MAIN, GERMANY - OCTOBER 06: A picture reading 'Danke, Steve' (Thank you, Steve) was placed outside of the Apple Store in remembrance of Steve Jobs, founder and former CEO of Apple Inc, on October 6, 2011 in Frankfurt am Main, Germany.
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Inland, ARC Forge $2.3B Net lease Deal

Inland, ARC Forge $2.3B Net lease Deal | NNN Leased Real Estate | Scoop.it
AR Capital LLC, the sponsor of several net lease REITs, and Inland American Real Estate Trust have entered a purchase and sale agreement worth approximately $2.3 billion and involving 294 retail, office and industrial assets.
David Busse's insight:

This is an interesting deal....a testimony to the diversity of real estate investors.

 

ARC is delighted with the deal because it helps them achieve their goal of 50% of portfolio being investment grade credits along with lengthening overall portfolio lease term and broadening diversification by industry and geography.

 

Inland is redeploying resources to multi-tenant retail, lodging, and student housing, which it sees as important for sustaining cash flow for investors and more in synch with current real estate trends.

 

Someone asked me the other day how ARC achieved its spectacular returns, and I pointed out that it is always good to start investing when cap rates are high and likely to head lower.

 

Now the shoe might be on the other foot. Interest rates may go higher, and Inland is "protecting itself" by divesting fixed rent/income assets in favor of property types with shorter term leases and (in an improving commercial real estate market) greater profit/cash flow potential.

 

What do you think? Is ARC right? Will cap rates stay low? Or do you accept Inland's hypothesis that shorter term rents are better now?

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Aviv REIT Announces Closing of $9.3 Million Acquisition - PR Newswire (press release)

Aviv REIT Announces Closing of $9.3 Million Acquisition
PR Newswire (press release)
The triple-net lease has an initial cash yield of 10.25%, initial lease term of 15 years and an annual compounded escalator based on CPI.
David Busse's insight:

10.25% CASH YIELD!!!

Why can't I find yields like that?

Perhaps some more research is due.

What can we tell about an operator of 54 SNF's?

Your thoughts?

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W.P. Carey to Buy Nontraded REIT in Stock Transaction

W.P. Carey to Buy Nontraded REIT in Stock Transaction | NNN Leased Real Estate | Scoop.it
W.P. Carey Inc., an owner of single- tenant buildings and sponsor of nonlisted real estate investment trusts, agreed to buy one of the companies it manages to expand its property holdings.
David Busse's insight:

Another step in the ongoing process of liquifying Nontraded REIT's.

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Net Lease Assets Can Be Safer Than Comparable Bonds ...

Net Lease Assets Can Be Safer Than Comparable Bonds ... | NNN Leased Real Estate | Scoop.it
However, an analysis of likely risks suggests that net lease assets can be safer than comparable bonds and that, therefore, net lease real estate investment trusts (REITs) may, in certain circumstances, be safer than bond funds.
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The Boulder Group Arranges Sale of a Single Tenant Day Care ...

The Boulder Group Arranges Sale of a Single Tenant Day Care ... | NNN Leased Real Estate | Scoop.it
Northbrook, IL WASHINGTON, D.C. – July 16, 2013 – (RealEstateRama) — The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant net leased Goddard School portfolio consisting of two properties located in...
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Acquisitions Associate CapLease - SelectLeaders

Acquisitions Associate CapLease - SelectLeaders | NNN Leased Real Estate | Scoop.it
Based in New York, CapLease, Inc is a publicly traded real estate investment trust, or REIT, listed on the New York Stock Exchange (NYSE:LSE) that owns over $2.0 billion of net leased primarily single tenant commercial real estate across the United...
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Debate over controversial lease accounting changes has ripple effect - Real Estate Weekly

Debate over controversial lease accounting changes has ripple effect - Real Estate Weekly | NNN Leased Real Estate | Scoop.it
Debate over controversial lease accounting changes has ripple effect Real Estate Weekly The new proposed accounting standard related to accounting for leases has been the subject of controversy and criticism from landlords, tenants, other lessors...
David Busse's insight:

This is one of the better preentations on the proposed lease accounting changes proposed by Financial Standards Accounting Board (FASB) and their European counterpart.The net effect is that Lessees must capitalize all leases greater than one year for real property. This will impact debt covenants for many Lessees, especially those using long term leases to finance store and facility development.My sense of it is that it may also lead companies that regularly enter into long term lease for their store properties to use conventional or structured mortgage financing instead..

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Delaware Statutory Trusts Growing Popular - NuWire Investor

Delaware Statutory Trusts Growing Popular NuWire Investor DSTs provide more freedom for investors to swap properties and defer tax payments, and are expected to attract a lot of investors coming back into the market following some unfavorable tax...
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