The single tenant Office/Industrial market is highly competitive today, however, this competitiveness varies due to the nature of the tenant and the relevant market. High credit tenants in primary – especially urban – markets are among the highest in demand. According to Costar the market for single tenant NNN investments is averaging 10,000 transactions a quarter.
A majority of those were Retail spaces, Corporate and Regional HQ’s in Primary and Secondary Markets. Of these primary markets, none is more interesting than Washington DC. Many Investors and Corporations have excess cash holdings and seek less volatile investments than the open stock and bond markets.
This trend has been realized through the increased activity of Institutional Investors, Private Equity Groups, and both publicly and privately traded REIT’s D.C. is particularly fascinating with the inclusion of Government and Government Contracting Tenants such as SAIC, Booz Allen, Lockheed Martin, Northrop Grumman, etc.
Generally considered some of the most desirable tenants in terms of longevity and credit, Contractors are frequently subject to shorter leases (5-7yr periods depending on the time frame of their contract), but they also tend to renew due to the nature of the space amenities they often require. Government (Federal or State) tenants are typically a highly favored tenant as well.
Investors however must be comfortable with a “non appropriation of funds” clause which the government entity may exercise because of budgetary constraints. The DC metro, particularly Northern Virginia, has many prospects for advancement, such as: » Several New Developments in the Ballston/Rosslyn corridor through Arlington (attracting tenants into new facilities who seek proximity to DC).» Phase I Dulles Metro Rail expansion scheduled to be in operation in 2013 should help the Dulles/Tech Corridor and Tyson’s Corner. » BRAC’s (Base Realignment and Closure) southward shift along the I-395/I-95 corridor south to Stafford and Fredericksburg.
It is anticipated that these shifts will draw strong investment grade tenants into these areas in the form of regional headquarters, manufacturing facilities, single tenant satellite operations and those who need proximity to either the tech or DOD (Department of Defense) base. Each of these developments should be considered as having quality single tenant investment opportunities in the coming 12-18 months.
www.calkian.com
Showing posts with label NNN. Show all posts
Showing posts with label NNN. Show all posts
Wednesday, January 25, 2012
Monday, March 7, 2011
Zara's Parent Buys Fifth Avenue Store for $324 Million
Spanish retailer Inditex SA (ITX) said it bought the former NBA Store at 666 Fifth Ave. in Manhattan for $324 million and will make it into a flagship store for its Zara clothing chain.
Inditex acquired the 39,000-square-foot (3,600-square- meter) storefront between West 52nd and 53rd streets, the Arteixo, Spain-based company said today in a statement posted on its website. The site was the home of the National Basketball Association’s flagship shop, where it sold team jerseys and other memorabilia.
That deal helped the tower’s owner, Kushner Cos., cover some of the debt incurred after purchasing the building the year before for $1.8 billion, then the most ever paid for a single NNN Lease Investment U.S. building.
Inditex is one of the worlds largest fashion distributors, with eight sales formats -Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe - boasting 4.430 stores in 73 countries.
The Inditex Group is comprised of over one hundred companies associated with the business of textile design, manufacturing and distribution.
www.bloomberg.com
Inditex acquired the 39,000-square-foot (3,600-square- meter) storefront between West 52nd and 53rd streets, the Arteixo, Spain-based company said today in a statement posted on its website. The site was the home of the National Basketball Association’s flagship shop, where it sold team jerseys and other memorabilia.
That deal helped the tower’s owner, Kushner Cos., cover some of the debt incurred after purchasing the building the year before for $1.8 billion, then the most ever paid for a single NNN Lease Investment U.S. building.
Inditex is one of the worlds largest fashion distributors, with eight sales formats -Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe - boasting 4.430 stores in 73 countries.
The Inditex Group is comprised of over one hundred companies associated with the business of textile design, manufacturing and distribution.
www.bloomberg.com
Tuesday, January 25, 2011
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
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
Monday, January 24, 2011
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
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
Friday, January 21, 2011
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 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
Wednesday, January 19, 2011
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.
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