Net Lease Investments for 1031 Exchange Client

Net Lease Market News Acquisition of Two Net Lease Investments for 1031 Exchange Client Calkain Companies, a national net lease real estate brokerage firm, recently brokered the sale of two triple net lease investment properties as part of a 15-month 1031 exchange assignment. The acquired net lease properties include a Wawa ground lease located in North Wildwood, NJ, and an Applebee’s restaurant located in Merritt Island, FL. Both assets were purchased in the fourth quarter of 2012, and totaled nearly $8MM in value. Calkain’s Andrew Fallon, Assistant Vice President, exclusively represented the purchaser, who sold their family-owned car dealership property on August 30, 2012. The family dealership site, located in the Washington, DC suburbs, was sold to a developer whose future plans include a 6-story residential building with structure parking. Back in 2009, Calkain first met with the family to advise on the possibility of a tax-deferred 1031 exchange strategy, which would satisfy the objectives of multiple family members and provide stable income through passive ownership of net lease investments. In 2011, Calkain was engaged to administer a full range of services to ensure a successful reinvestment of the sale proceeds. During the 15-month assignment, Calkain’s Fallon identified net lease investment opportunities, provided in-depth acquisition analysis and underwriting, and provided transaction support services throughout the different phases of the acquisition process. Utilizing the Calkain platform, Fallon ultimately facilitated a successful 1031 exchange totaling nearly $8MM. The family elected to purchase two long-term net leased properties for the stable income produced by the passive investment properties. The Wawa in North Wildwood, NJ was acquired in October. Per the absolute triple net terms of the ground lease, Wawa is obligated to build a brand new store in early 2013, and commence rent for a term of 20-years with structured rental increases. In November, the family closed on their second acquisition, completing their 1031 exchange strategy. The second asset, an Applebee’s restaurant, is uniquely located on the inter-coastal waterways in Merritt Island, FL. Like the Wawa, the Applebee’s property is subject to a 20-year absolute net lease with structured rental increases. The combined Wawa and Applebee’s rental income will provide nearly $500,000 of annual income. These transactions occurred within the last sixty days and will be recorded in the public records. WWW.CALKAIN.COM

Commercial Property Sales Outlook

Commercial Property Sales Outlook for U.S. Cut by ULI The Urban Land Institute cut its forecast for U.S. commercial real estate sales by 12 percent to $748 billion through 2014 because projections for economic growth are “down considerably” from six months ago. Deals for properties such as office buildings, shopping centers and warehouses probably will be $223 billion this year, $250 billion next year and $275 billion in 2014, according to a ULI survey released today of 39 economists and analysts from real estate investment, advisory and research firms. In a March report, sales were forecast at $250 billion this year, $290 billion next and $312 billion in 2014. REIT Returns One projection boosted from the last survey was for the performance of real estate investment trusts. Annual returns for equity REITs are forecast to be 15 percent this year and 10 percent both next year and in 2014. That’s up from the previous forecast of 10 percent this year, 9 percent next and 8.5 percent in 2014, the institute said. http://www.businessweek.com

Net-Lease Sale in Las Vegas Hits $1,736 PSF Mark

Marcus & Millichap Real Estate Investment Services Inc. has closed a record-breaking sale on the Las Vegas Strip for a 16,016-square foot Walgreens drugstore. While the sales price of $27.8 million may not be the largest transaction by dollar amount, it breaks down to $1,736 per square foot, making this the most valuable single-tenant drugstore ever to trade in the United States.

DineEquity, Inc. Announces Solid First Quarter 2012 Results

DineEquity, Inc. DIN +9.47% , the parent company of Applebee's Neighborhood Grill & Bar and IHOP Restaurants, reported financial results for the first quarter of 2012. "We are pleased with our first quarter performance. At DineEquity, we continue to work closely with IHOP and Applebee's on their respective brand-building strategies to innovate the menu, drive operational performance, and provide value for our guests," said Julia A. Stewart, Chairman and Chief Executive Officer of DineEquity. "Our business fundamentals remain healthy and our unique, highly franchised business model is generating strong free cash flow and enabling debt reduction, which are key measures of our success." First Quarter 2012 Financial Highlights -- Total debt was reduced by $85.9 million in the first quarter of 2012 as a result of net cash proceeds and financing obligation reductions from the refranchise and sale of Applebee's company-operated restaurants and free cash flow. The Company reduced Term Loan balances by $69.0 million, Senior Notes by $4.5 million, and financing and capital lease obligations by $12.4 million.

CWCapital Selling $345 Million of Distressed Real Estate Debt

Net Lease Market News CWCapital Asset Management LLC, a firm specializing in troubled commercial mortgages, is marketing $345 million of distressed debt in its biggest sale ever as investors circle souring loans. CWCapital, the second-largest servicer charged with resolving problem real estate contained in securities, is selling a portfolio linked to properties spanning the U.S. from Brooklyn, New York to Pasadena, California, according to Mission Capital Advisors, the manager of the sale. Retail buildings account for the largest share of the pool, comprising 36.3 percent, followed by office buildings at 28.2 percent, according to Mission. http://www.bloomberg.com

Net lease Market one of the Hottest Commercial Real Estate plays in the Country

With money to burn but still having a strong aversion to risk, investors have increasingly turned single-tenant properties into one of the hottest commercial real estate plays in the country.

The single-tenant, net lease investment sales market is expected to continue growing, according to Jones Lang LaSalle.

"The low interest rate environment and the lack of safe-haven investment alternatives are driving new sources in build-to-suit and sale-leaseback activity, and investors have incredibly healthy appetites for stable and dependable income streams that single-tenant assets provide," said Guy Ponticiello, managing director Jones Lang LaSalle's Corporate Finance & Net Lease division.

Fully leased core properties have been highly sought-after by investors, often from overseas, and prices for these properties have been strong, according to Jane L. Mendillo, president and CEO of Harvard Management Co. in her most recent Harvard University Endowment report.

"We were able to sell some of our portfolio properties in this category at excellent values," Mendillo said. And now Harvard is ready to invest in new round of such properties.


http://www.costar.com/News/Article/Single-Tenant-Property-Sales-Surge-To-Record-Numbers/132751

Net Lease Cap Rates, Sector by Sector

By Winston Orzechowski,
Research Director, Calkain Cos.

Net lease cap rates averaged 7.75 percent for the first quarter of 2011, continuing the rate drop that began in the second half of 2010. The key driver in this trend has been an increased demand for high-quality net lease properties — assets which feature a strong credit tenant, good location and favorable lease terms – and the scarce supply of those high quality assets. Investors have clearly shown a lopsided preference for these triple-net-lease investment properties and, as 2011 progresses, demand will outpace supply.

http://www.cpexecutive.com/newsletters/capitalmarkets-newsletter/netleasecolumn/net-lease-cap-rates-sector-by-sector/

Boston Net Lease Market

Boston Net LEASE News

Calkain Companies Inc., a national real estate investment brokerage firm, has recently opened a Boston-area office, located in Burlington, in order to better serve the New England and Northeast markets. The office will be staffed by three industry veterans: senior managing director Stan Wyrwicz, formerly the chief financial officer of General Investment and Development Cos. and also CFO with Cabot, Cabot and Forbes; managing director Rich Murphy, who has been part of the Calkain team for a year and who previously worked at the controller level for the Mills corporation Follow this company and Akridge Real Estate Services; and vice president Mike O’Mara, wo has been in commercial real estate for 20 years.

CB Richard Ellis/New England, based in Boston, has named Jason Levendusky, Taidgh McClory and Patrick Mulready partners of the firm. Levendusky, who joined CBRE/NE in 2001, is a senior member of the Massachusetts suburban brokerage team. McClory, who joined CBRE/NE in 2003, is senior vice president, director of marketing & client services. Mulready, who began his career at CBRE/NE in 1996 as an appraiser, specializing in the valuation of office properties throughout Greater Hartford, transferred to the Hartford brokerage staff in 1998 to focus on the sale of investment properties.

Individual investors will continue to be attracted to Net Lease deals because those transactions are viewed as safe, income-producing real estate investments, says CEO of Calkain Jonathan W Hipp “We think that Boston-area is going to stay very competitive net lease market.

Net Lease Market Report

Net Lease Market News


Calkain Net Lease Market Report provides in-depth analysis of the net lease market

A recent theme in the net lease mar­ket has been the success of primary markets compared to their tertiary counterparts. While primary markets have been resilient and recently showed remarkable success, tertiary markets con­tinue to struggle. The Washington DC area (D.C., Maryland and Virginia) is chief among the top tier markets and its rela­tive success is easily measurable.

Net lease cap rates for retail, market compressed in the first quarter of 2011, while investment sales remained strong in the single tenant market,according to data from Calkain. Calkain Research provides in-depth analysis of the net lease market. Our intimate knowledge and years of experience in the net lease industry gives us the unique opportunity to provide thought leadership and perspective.Through highly focused coverage over a diverse range of topics, we facilitate a culture of knowledge and enable intelligent investment strategies.

The net lease market continues to improve, but many of the factors driving this appear short term. As more properties come to market due to improved pricing fundamentals, many believe that the cap rate compression will plateau. The high demand and scarcity of high performance markets will continue drive their cap rates lower.
www.calkain.com/reports/research/calkain

National Retail Properties, Inc. Announces New and Expanded $450 Million Unsecured Credit Facility

Net Lease Market News

National Retail Properties announces new and expanded $450 million unsecured credit facility Co announces the closing of a new $450 million unsecured credit facility, replacing its existing $400 million credit facility. The new facility matures May 2015, with an option to extend maturity to May 2016. The facility is priced at LIBOR plus 150 basis points. The new facility also includes an accordion feature to increase the facility size to $650 million.

Calkain Research provides a variety of reports on all aspects of the net lease market. Our coverage includes: retail, industrial, urban, QSR, banks, pharmacy and more. We present a comprehensive and detailed picture of the market; providing investors with the information they need.
Briefing.com is the leading Internet provider of live market analysis for U.S. Stock, U.S. Bond, and world FX market participants.
National Retail Properties (NYSE: NNN), a real estate investment trust, invests in single-tenant retail properties generally subject to long-term, net leases.
As one of only 114 out of the more than 10,000 publicly-traded companies that have increased annual dividends for 21 or more consecutive years, we are a powerful partner for our retail customers and a proven investment for our shareholders. The average annual total return to shareholders has been 13.6% over the past 15 years.
http://money.msn.com/business

The Wawa Net Lease Market

As a relative newcomer to the net lease market, Wawa convenient store gas stations are one of the hottest sought after triple net lease investment properties in the net lease market today. With an implied credit rating of BBB- / outlook Stable, most investors understand the credit-worthiness of
this privately owned company, which is considered one of the strongest convenient store operators in the country. In 2009, Wawa was ranked No. 55 in Forbes’ America’s Largest Private Companies list. Wawa currently operates more than 570 convenient stores throughout the mid-Atlantic, 270+ of which include gasMost Wawa net leases properties offer an investor long-term security and absolutely no management responsibilities in the form of a 20-year primary term nnn ground lease. These ground leases provide additional investment security given the nature of the real estate investment made by Wawa’s real estate team, including the Wawa Engineering and Construction Department which is responsible for the design, engineering and construction of all new stores and remodels. As with any ground lease investment, a landlord should be comforted by the fact that the tenant, in this case Wawa, has made a significant capital investment in the construction of the building, which at the end of the lease will become property of the ground lease owner.
Also driving the demand and value of Wawa net lease properties is the strong real estate fundamentals of the property sites. Wawa’s real estate team has specific site select criteria, which focus on key trade area location characteristics. Wawa net lease properties are typically located at signalized corners and out-parcel/pads of shopping centers with good visibility and ingress/egress. Ideal trade area characteristics include adequate population and minimum traffic counts of at least 25,000 vehicles per day. Sites should be located on high-volume intersections near other commercial traffic generators.

Wawa's namesake is a Native American word for the Canada Goose in flight, which is also incorporated into the company's logo. Wawa owns and operates convenience stores and gasoline stations in Pennsylvania, New Jersey, Delaware, Maryland, and Virginia. These stores offer a fresh food selection under the Wawa brand including deli products, wraps, breakfast sandwiches, bakery products, fresh produce, and dairy products. The first Wawa store opened in April 1964 in Folsom, Pennsylvania.

Net Lease Investment Medical/Retail Center Offered for Sale

Reston, VA - Calkain Companies, a national single tenant net lease investment brokerage firm, has been named the exclusive advisor for the sale of Cedar Creek Station, a retail strip center in Strasburg, Virginia.

The investment sales team will be led by Betty Friant of the Calkain Realty Advisors. The property is listed for sale with an asking price of $2.85M, which provides an initial cap rate of 8.88%, with predominantly medical tenants.

The property is located in a gateway entrance to Strasburg, at an interstate intersection and near Virginia's Inland Port. Newly constructed in 2009, this modern brick professional complex includes 15,000+ sq ft of space. The property currently offers a well-located and highly visible home to numerous retailers and various medical practices.

Strasburg is situated in the top of Virginia, approximately one hour west of the urban concentration of Northern Virginia and Washington DC. The area is the Mid-Atlantic crossroads for Interstates 81 and 66. Interstate 66 provides easy access to points east including Washington, D.C. and Baltimore. Interstate 81 travels north-south the entire length of Shenandoah County, with nine interchanges including one at I-66, north of Strasburg.

Cedar Creek Station is strategically located along Old Valley Pike near the intersection of Interstate 81 and Route 11, just sound of Interstate 66. There are over 100,000 residents living within a 15 mile radius. The surrounding area includes lodging, industrial complexes and a retirement community.
Investors interested in net lease investment NN’s are more likely to have a passion about their business. They want to inform clients, grow their customer base and put their name on the Net lease market, while investors interested in NNN’s are more likely to be concerned purely with the profitability of the buildings.

For More Information Please Contact
www.bfriant@calkain.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

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

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.