China Lead in Real Estate Market Worldwide

Net Lease Market News

http://www.crunchyroll.com/pulse/refusing-to-leave-40538

China had $197.1 billion of transactions in real estate market last year, 23 percent more than in 2009, the New York based company said in a statement today. That represented 34 percent of the $582 billion of deals worldwide, down from 41 percent the previous year as Chinese authorities sought to prevent the property market from overheating.

About 95 percent of investments in Chinese real estate market in 2010 were land deals for development projects, according to the statement. The largest was the purchase of a site in Nanjing for $1.78 billion.

The U.S. commercial real estate market has taken longer to recover from the financial crisis than Asia and Europe. The $55.3 billion of U.S. deals made in the last three months of 2010 made it the strongest quarter since 2007.

Among the biggest U.S. transactions was the $1.36 billion purchase of 111 Eighth Ave. in Manhattan by Google Inc. in December and Boston Properties Inc.’s $684 million acquisition of Boston’s John Hancock Tower, according to RCA.

With just over 1.3 billion people (1,330,044,605 as of mid-2008), China is the world's most populous country.
As the world's population is approximately 6.7 billion, China represents a full 20% of the world's population so one in every five people on the planet is a resident of China.

By the late 2010s, China's population is expected to reach 1.4 billion. Around 2030, China's population is anticipated to peak and then slowly start dropping.

Blackstone Bets on Industrial Property

Net lease market News


Blackstone bets big on industrial property rebound

In six months, the private equity firm's real estate arm, Blackstone Real Estate Advisors, has amassed a portfolio of 275 industrial properties, spanning about 45 million square feet.

It might more than triple its holdings to about 150 million square feet, according to an industry source with knowledge of the plans, but who is not authorized to talk about them.

These warehouses and distribution facilities -- sometimes as large as 17 U.S. football fields -- sit beside highways, near airports and shipping ports throughout the United States. The hulking concrete shells are stuffed with televisions, shampoo, soft drinks and other goods headed for stores. Tenants include shippers, manufacturers and retailers.

"Industrial real estate in the private market has been cheaper than other property sectors," said Green Street Advisors analyst Steven Frankel. "Industrial last year had not recovered at nearly that same pace as apartments, or hotels or the majority of other sectors. Pricing looked very attractive on a relative basis."
SOURCES:http://www.reuters.com/article/idUSTRE70O68920110125

Net Lease Industrial Assets it has been estimated that as much as $97 billion will be invested in the US commercial market by global investors in 2011. DTZ, a British-based real estate services firm, stated this represents a 54% increase from their December 2009 prediction. In short, growing confidence in real estate investment will pull investors off the bench – leaving the industrial sector poised to benefit. However, investors scrambling to find viable and profitable net lease investments are running into a short term problem. There is a lack of both current supply and new industrial construction in the pipeline.
Investors want quality, top rated tenants in the strongest urban markets. These investments are increasingly rare. However, “Mission Critical” net lease industrial assets are available - investors may just need to rethink their criteria. These properties often have existing permitted industrial uses, are located in and around quality commercial markets, and provide goods and services unique to their businesses. The real values of these investments are not only the tenant, or even the property, but the permitted use so critical to the nature of the business. Sellers are willing to sign long-term leases at higher returns than current market rates because these properties are so critical. Increasingly, investors are overlooking traditional analytics and considering these investments. With intelligent investment they can provide a highly profitable return.

How to Beat the Taxman

How to Beat the Taxman don't pay any more than you have to James Brennan on 1031 Exchanges

WHAT ARE CLIENT’S CONSIDERATIONS WHEN SELECTING AN ENTITY TYPE TO HOLD TITLE TO REAL ESTATE?

BRENNAN:
Clients unfortunately default to an LLC for entity choice simply because of asset protection. However, when co-investing a Joint Member LLC creates exit strategy concerns as it can hamper one investor’s ability to properly structure a like-kind exchange. Clients need to carefully examine the structure that will house their real estate investment and contemplate the next investment assuming this investment is profitable.

WHAT TYPE OF STRUCTURING DO YOU SEE AT THE ACQUISITION AND DISPOSITION STAGES?

BRENNAN:
Often as a function of how real estate syndications are marketed, most General Partners or Developers use a GP/ LP approach to structuring the laddered returns both for limited partners and general partners. This structure is fine for economics and often yields the intended result with a properly drafted operating agreement. However, partnership interests are not eligible for exchange, so limited partners need to focus on real estate interests that are "deed-able" to make the interest conducive to like-kind exchange treatment.

Clients do not need to seek out a commercially packaged Tenant-in-Common deal to achieve these results, clients simply have to select a well-versed Sponsor and a CPA/tax attorney that can craft a win-win structure for both the limited partners and the general partner.

WHAT TYPE OF ESTATE PLANNING TECHNIQUES DO YOU SEE UTILIZED?

BRENNAN:
The $5 million and up net worth set gravitates mostly to a living trust at first as "Family Stewards" are looking to make managing assets easy for heirs, so a Revocable Living Trust gives the comfort that properties will funnel to the right place via contract and the Grantors (current property owners) do not have to sacrifice control of the assets currently.

In my opinion, clients do not pay adequate attention to estate taxes and how assets are titled. Real estate investors particularly tend to have a desire to control their investments; however, certain investments, such as triple net leases, lend themselves to estate planning and passivity.

Clients should really try to plan for both capital gains events and estate events. Unfortunately too much attention is put on deductions, current income, and economics of deals; however, clients face 25-50% in capital gains taxes upon disposition and upwards of 45-55% in estate taxes. This level of taxation will erode a substantial amount of the cash you will net from an investment when attempting to build real wealth.

WHAT PROPERTY TYPES ARE BEING SWAPPED?

BRENNAN:

Right now institutional investors and traditional buy-and-hold investors believe the market is improving- thus, why "sell in a soft market?". However, clients with low-basis property that have certain events (death, retirement, financial distress) are opting to conduct like-kind exchanges.

An example would be an apartment building investor retiring to Florida and swapping out of an Arlington Apartment building and buying a Walgreens NNN lease as replacement property. The client gets cashflow without the "toilets, tenants, and trash".

clik here for more information
www.1031esgroup.com

The End of The Buyer’s Market

The End of The Buyer’s Market

Getting a Net Lease Asset Before The Market Enters Full Recovery Could Be a Good Move.

2010 Hotel Horizons report published by Colliers PKF Hospitality Research. Average room rates, though, were generally flat.

Analysts consider occupancy a leading indicator — it climbs first, then rate increases follow. This year, they say, hotel rates will begin rising again. “We still have a long way to go, but we’re seeing early signs that because of strong demand recovery in 2010, managers are beginning to move room rates,” said R. Mark Woodward, president of Colliers PKF Hospitality Research. “We’re literally at the turning point.”

For travelers, that probably means the beginning of the end of the buyer’s market they have enjoyed over the last couple of years.

Debt investors are wagering that the worst is over for commercial real estate, driving prices on mortgage bonds to the highest in more than two years.

“Investors have gotten more comfortable and have started putting money back into CMBS,” Chris Callahan, head of commercial-mortgage backed bond trading at Credit Suisse Group AG, said in an interview at the Commercial Real Estate Finance Council’s conference in Washington. “It has gone from being the red-headed stepchild to being a viable asset class again.” http://www.bloomberg.com/news/2011-01-25/commercial-real-estate-debt-hits-two-year-high-as-investors-bet-worst-over.html.

Here are the points as we outlined them:

1.The labor market is beginning to show signs of healing.
2.Production is on the rise, albeit from anemic levels.
3.Home sales rose sharply from November to December.
4.Profits are surprisingly on the upside.
5.Financial markets are rallying, to some extent.
6.Core consumer spending, driven by pent-up demand, appears to be regaining some momentum.
7.Factory orders could be picking up from rock-bottom levels.
A common thread in many of these is the sign of some gain from heavily recessed conditions. None of these marks a return to levels we would hope to consider “normal” but they do represent small, perhaps significant, changes. Taken together they lend credence to the notion that the bottom of the crisis has been felt and we are now on the road to recovery, albeit “rocky” recovery.

we also would like to mentions that “Consumers are going to have to remain more defensive than offensive in 2011”. But what about investors? If these signs really point to recovery, this could be one of the last chances to invest in a recessed market. Net lease assets have fared better than most commercial real estate and continue to be a safe bet for the future. Financing still remains tough but for those with the resources, getting a net lease asset before the market enters full recovery could be a good move.

Triple Net Lease Checkers For Sale

Triple Net Lease Checkers For Sale

Asking Price $1,077,551
This Triple Net Lease property is located at 6200 9th Street North, St. Petersburg FL 33702

LEASE SUMMARY
NOI $79,200
Rent/Month $6,600
Rentable Square Feet 830 +/- sf
Land Area 22,500 +/- sf
Tenant Name Checkers Drive-In
Restaurants, Inc.

Website www.checkers.com
Ownership Type Ground Lease
Lease Type Triple Net Lease
Landlord Responsibilities None
Lease Term 15 years
Lease Commencement Date October 2004
Lease Expiration Date October 2019
Increases 10% each 5 years
Options Three (3) at Five (5) years
Next Increase October 2014


FINANCIAL HIGHLIGHTS
•High traffic, signalized corner location
•Outlot to Winn Dixie / Big Lots co-anchored shopping center
•Checkers/Rally is the nation's largest chain of double drive through restaurants
•Checkers/Rally operates over 800 restaurants nationwide
•Checkers/Rally was taken private in 2006 through merger with Taxi Holdings Corp, a Wellspring Capital Management affiliate
•Systemwide sales of $187M in 2005.


For More information Contact:

GUENTER MANCZUR, CCIM
(813) 282-6000
gmanczur@calkain.com

McDonald's Profit Rises 2.1%

McDonald's Profit Rises 2.1%


McDonald’s Corp., the world’s biggest restaurant chain, reported a 2.1 percent gain in fourth- quarter profit as new menu items attracted diners, offsetting slower-than-estimated December sales because of snowstorms.

Net income rose to $1.24 billion, or $1.16 a share, the Oak Brook, Illinois-based company said today in a statement. In the U.S., same-store sales advanced 2.6 percent last month, compared with a 4 percent average of five analysts’ estimates compiled by Bloomberg. MCDONALDS
AVERAGE PROPERTY AND LEASE
Price Range
$500,000 - $2.5M

CAP Rate (6 month avg)
5.65%

NOI
$65,000

$/sf
$305.00

Building Size
4,000 sf

Lot Size
1.10 +/- acres

Lease Term
20 Year Ground Lease

Escalations
10% Every 5 years

CREDIT RATING
A3 A

Moody's
RECENT SALES
Whitman, MA

$1,220,000 | 5.74%

Cape Coral, FL

$1,067,000 | 5.62%
MCDONALDS TREND

CAP Rate

2009 avg. 5.74%

2010 avg. 5.81%

McDonald's, with its "golden arches" and Dollar Menu, remains the dominant brand in the QSR space. With primary, secondary, and tertiary market locations, McDonald's size and reach provide a strategic competitive advantage, as well as varying risk/return investment opportunities for net lease property buyers. Brand recognition, operating stability, and strong credit ratings reinforce McDonald's standing as a prime net lease investment property.

McDonald's Corporation (NYSE: MCD) is the world's largest chain of quick-service restaurants (QSR), serving nearly 47 million customers daily, with about 32,000 restaurants serving burgers and fries in about 120 countries. McDonald's Corporation franchises and operates McDonald's restaurants that serve a varied, limited, value-priced menu in more than 100 countries globally.

Pep Boys Said to Explore Possible Sale

Pep Boys - Manny, Moe & Jack, the Philadelphia-based auto-parts retailer, is considering a sale of the company and working with Bank of America Corp. to explore strategic options, said two people with knowledge of the matter. The shares rose the most in almost 10 years.

Pep Boys isn’t likely to run a formal sales process, and is trying to drum up interest among a handful of private-equity firms such as Leonard Green & Partners LP, Bain Capital LLC and TPG Capital, said one of the people, who declined to be identified because the process is private. Pep Boys tried unsuccessfully to sell itself in the past, the people said.

The company has renewed efforts to find a buyer as its earnings improve and private-equity firms seek takeover targets in retail, the people said. Founded 90 years ago, Pep Boys has more than 600 stores across the U.S. offering service and parts. It earned $23 million in the year ended Jan. 30 after four straight years of losses. In December, Pep Boys said profit for the first nine months of the year climbed 36 percent, bolstered by new tire centers and increasing customer traffic.

Pep Boy leases are absolute net leases, while Advance Auto generally signs a net lease that provides for the Landlord to be responsible for the maintenance of the roof and structure of the building. Generally speaking, Pep Boys utilizes a larger building footprint with six to eight service bays attached to the retail storefront. This is important for two reasons: 1) with a cost segregation study, Landlords are able to capture significant amount of accelerated depreciation and 2) Landlords have relatively large buildings and land parcels (17,000-22,000 sf buildings on a 2+ acre lots), which offer advantageous options for re-use and/or redevelopment.

The Pep Boys — Manny, Moe & Jack (NYSE: PBY), is an automotive service and retail chain. The Company is engaged in automotive repair and maintenance, and the sale of automotive tires, parts and accessories. Competitors include Advanced Auto Parts and AutoZone.


Net Lease Market

Brooklyn Showed Some Improvement in 2010

Commercial property sales in Brooklyn showed little improvement in 2010 even as the volume of sales surged in Manhattan.

There were 778 commercial real-estate transactions in Brooklyn in 2010, down from 805 in 2009, according to a new report by commercial-brokerage firm Terra CRG LLC.

TerraCRG: Commercial Real Estate Stabilizing

Terra CRG just released its 2010 report on the state of the commercial real estate market in Brooklyn. According to the report, the billion dollars or so in sales is about in line with 2009 number. While you can check out data on retail and multi-family sales here, we were particularly interested in the levels at which developable property was changing hands. Despite cries of oversupply and a handful of high-profile projects going belly up, developers apparently have not lost their appetite for North Brooklyn. Williamsburg had the highest number of sales (8) and the highest dollar volume ($20,597,593). As the chart above shows, Williamsburg and Greenpoint also put up the highest numbers on a price-per-buildable-square-foot basis. Interesting.

Net lease Investment For Sale

Net lease Pet Supermarket

Net Lease Pet Supermarket & Humana | Spring Hill, FL

Net Operating Income (NOI) $132,121 Highlights
This Net Lease property is Located directly on US-19, the main commercial artery in Spring Hill with excellent frontage and visibility. Pet Supermarket has expressed that the site is one of the highest performing locations. Located across from Target and surrounded by several national retailers, this site offers investors the opportunity to buy in an already established market.

Net lease Pet Supermarket
Lease Type NNN
Lease Term 10 years
Rentable Area 7,000 +/- sf
Options Two (2), Five (5) year
Increases CPI Annually
Land Area 1.08 +/- acres
Humana
Lease Type NNN
Lease Term 2 years
Rentable Area 2,000 +/- sf
Options Two (2), Two (2) year
Increases 11.5% after year 1
Land Area 1.08 +/- acres








For More information abaout this Net lease property Contact:

Teal Henderson
Associate
(813) 282-6000
thenderson@calkain.com

Net Lease Market: Honolulu among Top Commercial Real Estate Markets

Net Lease Market: Honolulu among Top Commercial Real Estate Markets: "Honolulu among Top Commercial Real Estate Markets Honolulu ranks among the top markets for commercial real estate in the U.S., according t..."

Honolulu among Top Commercial Real Estate Markets

Honolulu among Top Commercial Real Estate Markets

Honolulu ranks among the top markets for commercial real estate in the U.S., according to a Moody’s Investors Service study.

The ratings agency said Honolulu was the strongest of the markets surveyed in its study of properties in commercial mortgage backed securities during the fourth quarter.

Rounding out the top five markets were New York, Los Angeles, Washington D.C., and Orange County, California.

Moody’s said commercial real estate markets across the country either improved moderately or were stable during the fourth quarter. The ratings agency ranks markets through a color-coding system in which red is the weakest, yellow is better and green is the strongest.

“The commercial real estate markets are continuing down the road to recovery, though the fact that most markets remain yellow indicates that a comfortable point of stability has not yet been reached,” says Moody’s Vice President Keith Banhazl, in a statement issued by the ratings agency.

Net lease Investment Property For Sale

Net lease Investment Property For Sale

Regal Cinema | Royal Palm Beach, FL

$20,000,000
$5,770,000 in equity needed
1003 N State Road 7 | Royal Palm Beach, FL 33411
NOI $1,399,793.25
Lease Expiration Date 04/30/2018
Increases Every 5 years
(Next Increase 5/1/2013)
Options Two (2), Five (5) year options
Lease Type NNN
Credit Rating S&P: BB- Sr Sec Debt
B+ Corp Rating
Land Area 23.6 +/- Acres
Existing Loan Balance $14,230,000
Amortization 30 years
Interest Rate 5.61%
Annual Debt Service $1,011,236
Loan Maturity 9/1/2015
Balloon at Maturity $13,050,231
Loan Type Non-Recourse


HIGHLIGHTS
• This net lease property is 76,701 square ft 18 screen theatre on over 23 acres in suburban West Palm Beach, Florida
•This Net lease property is located near WalMart Supercenter, Super Target; adjacent to Shoppes at Regal Centre, numerous restaurants and national retailers
•This net lease Location performs at or above all major industry metrics for performance with historical sales data available during due diligence


LOCATION OVERVIEW

Teal Henderson
Associate
(813) 282-6000
thenderson@calkain.com
For More information Contact:

Patrick Nutt
Senior Associate
(813) 282-6000
pnutt@calkain.com

Walgreens NNN Lease as Replacement Property

Walgreens NNN Lease as Replacement Property
According to the IRS, in 2002 individuals entered into 143,184 1031 exchanges. By 2005 that number had peaked to 283,560. Everyone can guess what happened next. The market dropped - dragging investments down with it. As a result, anywhere between 59,192 and 78,923 exchanges were estimated to be performed by individuals in 2008. However, it’s likely we’ve already returned to 2002 level numbers.

Institutional investors and traditional buy-and-hold investors believe the market is improving- thus, why "sell in a soft market?". However, clients with low-basis property that have certain events (death, retirement, financial distress) trigger property sales are opting to conduct like-kind exchanges. The natural processes of the life cycle along with an improving market have forced many investors out of the trenches.

An example would be an apartment building investor retiring to Florida and swapping out of an Arlington Apartment building and buying a Walgreens NNN lease as replacement property. The client gets cashflow without the "toilets, tenants, and trash". The market may not be perfect – but time waits for no one. Many of the baby boomers who could afford to wait just a few years ago are acknowledging and accepting current realities.

Another interesting and timely example are landowners selling to energy companies drilling on their property. This low-basis acreage with no depreciation benefits is great fuel for an income-producing commercial replacement property whether it be retail, industrial, or office. These clients often do not know that their land is "like-kind" with commercial real estate, and they do not know that passive real estate investments are out there that they do not have to actively manage.

Clients should really try to plan for both capital gains events and estate events. Unfortunately too much attention is put on deductions, current income, and economics of deal. Investors now face 25-50% in capital gains taxes upon disposition and upwards of 45-55% in estate taxes. This level of taxation will erode a substantial amount of the cash you will net from an investment when attempting to build real wealth.

Two Net Lease Facilities Acquired for $52.4M

Corporate Property Associates 17 - Global Incorporated has acquired two cold storage facilities, one each in Unadilla, Georgia and Rincon, Georgia, totalling approximately 497,002 square feet.

The company purchased the facilities from Flint River Services, Inc. and entered into a net lease agreement for the same with Flint River Services, LLC, an affiliate of Bay Grove Capital, LLC.

The total cost of acquiring the facilities, including estimated acquisition fees and expenses, was approximately $52.4 million.

The facilities are leased to Flint River under a net lease. The lease has an initial term of 20 years and provides for three ten-year renewal options. http://atlantarealestate.citybizlist.com/3/2011/1/18/Two-Georgia-Cold-Storage-Facilities-Acquired-for-52.4M.aspx

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Net Lease Market: Net lease Investment

Net Lease Market: Net lease Investment: "Net Leased MEDICAL-RETAIL at Interstate in Northern VA Asking $2,850,000 | 100% Occupancy | 8.8% CAP 33820 Old Valley Pike | Strasburg..."

Net lease Investment

Net Leased MEDICAL-RETAIL at Interstate in Northern VA


Asking $2,850,000 | 100% Occupancy

33820 Old Valley Pike | Strasburg, Virginia
NOI $253,041
Rent/Month $24,224
Rent/SF $18.69
Land Area 2.021 +/- sf
Ownership Type Fee Simple Absolute
Lease Type NN
Landlord Responsibilities Roof, Structure, Parking lot
Options Two (2), Five (5) year

*We are CAPing 2010 rents starting in an October/September year so it will not necessarily tie to the rents listed below on a calendar year basis.

HIGHLIGHTS
•Excellent Investment Yield at Aggressive CAP Rate
•New Construction (2009)
•Strasburg's Gateway Entrance at Interstate Intersection and near Virginia's Inland Port.
•Modern brick professional complex with 15,000 sqft in Strasburg, Virginia
•Located at intersection of Interstate 81 and Rt. 11 just south of Interstate 66
•Strong tenant mix with predominance of medical
•Supported by travelers, located adjacent to Fairfield Inn & Suites
•Also adjacent to Homewood Retirement Community and near the new 500,000 sqft. Solaris/Mercury Paper Plant




LOCATION OVERVIEW For More information Contact:

BETTY LEARNED FRIANT
Vice President
(703) 787-4714 x16
bfriant@calkain.com

NNN Arby's For Sale

Welcome new investors. Each property has a brief description and a one-page flyer (attached). For a full marketing brochure, please email to jhipp.calkain.com previous lists are posted on Net lease Market after 2 weeks delay.







Arby's Four Location Portfolio
Highlights
•Strong Locations on outparcels to Super Wal-Mart or Home Depot Anchored Centers
•Landlord Retains Possession of All Trade Fixtures and in-store equipment
•Percentage Rent in addition to base rent
•Personal Guarantee for each location

Roanoke Rapids, NC
Price $1,747,366
NOI $122,316
Lease Term 20 years
Expiration 2026
Lease Type NNN
South Hill, VA
Price $2,059,205
NOI $144,144
Lease Term 20 years
Expiration 2026
Lease Type NNN

Rocky Mount, NC
Price $1,777,315
NOI $124,412
Lease Term 20 years
Expiration 2026
Lease Type NNN
Wake Forest, NC
Price $2,273,977
NOI $159,178
Lease Term 20 years
Expiration 2026
Lease Type NNN

For More information Contact:

Rick Fernandez
Managing Director
(703) 787-4714
rfernandez@calkain.com