NNN Lease Market
The owners of Manhattan’s 11 Times Square, a 40-story skyscraper built as the office market was peaking, have signed their second tenant, law firm Zukerman Gore Brandeis & Crossman LLP. The lease is for 17,144 square feet (1,593 square meters) of the 1.1 million-square-foot tower, said Peter Turchin, a broker at CB Richard Ellis Group Inc. (CBG) who represents the building’s landlords.
The Zukerman lease, signed May 20, should help turn around the $1.2 billion project, Turchin said. Construction of the skyscraper was begun in 2007 during a boom in Manhattan office demand, and completed in 2010 after the credit bubble burst.
“The building was constructed in a flat market, and it is now seeing a benefit from a market that’s in rebound mode,” Turchin said. “I have a high degree of confidence that there will be other tenants, and you’ll be hearing announcements like this in the next coming months.”
Tuesday, May 31, 2011
Irish Banks PLC Has Struck a Deal to Sell U.S. Commercial Real Estate Portfolio
NNN Lease Market News
Allied Irish Banks PLC has struck a deal to sell a portfolio of roughly $1 billion in U.S.
"We certainly have a portion of our loan book that we need to delever," said Paul McDonnell, head of real estate for corporate banking at the Bank of Ireland. "It's a pretty good quality book; the market is reasonably strong for this type of asset."
Anglo Irish Bank Corp., which is being wound down by Ireland, also is being pressed by regulators to sell its $10 billion U.S. commercial real-estate portfolio. While decisions have yet to be made about how much of the portfolio to sell, Anglo's U.S. holdings have been closely watched given its size. Numerous U.S. investors have made trips to Ireland to discuss possible purchases, according to people familiar with the matter.
The price paid by Blackstone and Wells Fargo for the Allied Irish loans is higher than other recent deals, partly because commercial real-estate values have been rising in many of the top U.S. markets. Also, competition for distressed real-estate assets is intense among the funds that raised money when the downturn hit.
http://online.wsj.com/article
Allied Irish Banks PLC has struck a deal to sell a portfolio of roughly $1 billion in U.S.
"We certainly have a portion of our loan book that we need to delever," said Paul McDonnell, head of real estate for corporate banking at the Bank of Ireland. "It's a pretty good quality book; the market is reasonably strong for this type of asset."
Anglo Irish Bank Corp., which is being wound down by Ireland, also is being pressed by regulators to sell its $10 billion U.S. commercial real-estate portfolio. While decisions have yet to be made about how much of the portfolio to sell, Anglo's U.S. holdings have been closely watched given its size. Numerous U.S. investors have made trips to Ireland to discuss possible purchases, according to people familiar with the matter.
The price paid by Blackstone and Wells Fargo for the Allied Irish loans is higher than other recent deals, partly because commercial real-estate values have been rising in many of the top U.S. markets. Also, competition for distressed real-estate assets is intense among the funds that raised money when the downturn hit.
http://online.wsj.com/article
Friday, May 20, 2011
NNN Dollar General
NNN Lease Market News
Dollar general for sale!
Triple Net Lease Information on Dollar General
Ferrum, VA Madison, VA Richmond, VA
$1,319,225 $1,294,975 $1,361,239
HIGHLIGHTS
•Brand new, 15-year NNN lease
•3% rent increase in lease-year 11 & 10% increases every 5 years during the option periods
•Guaranty from Dollar General Corp., the largest discount retailer in the US
•Strong tenant with stable & positive outlook; improving credit ratings
•Strategic trade area locations with supporting demos & target market characteristics
Dollar General Corporation
Industry Discount, Variety store
Founded 1939
Headquarters Goodlettsville, Tennessee, U.S.
Number of locations 9200+[1]
Products Low cost items
Revenue $11.796 billion (2010)
Operating income $953.258 million (2010)
Net income $339.442 million (2010)
Employees 79,800
References: In June 2007, Dollar General was acquired by a group of private investors.
Dollar General Stores are typically in small shopping plazas or strip malls in local neighborhoods. The company acquired the 280 stores of the P.N. Hirsh Division of Interco, Inc. (now Furniture Brands International, Inc.) in 1983 and in 1985 added 206 stores and a warehouse from Eagle Family Discount Stores, also from Interco, Inc. In recent years, the chain has started constructing more stand-alone stores, typically in areas not served by another general-merchandise retailer. In some cases, stores are within a few city blocks of each other.
Since the turn of the century, Dollar General has experimented with stores that carry a greater selection of grocery items. These stores (similar to the Wal-Mart Supercenter, but much smaller) operate under the name "Dollar General Market".
Recently, Dollar General began selling produce, meat, and baked goods in new stores called "Dollar General Market" in former supermarket locations, even though this idea is similar to the Dollar General Market.
VIRGINIA LOCATIONS
For More information Contact:
Associate
(703) 787-4714
Wednesday, May 18, 2011
Africa Market Is The Epicenter of Growth For The Future
Dabur India Ltd. (DABUR), a maker of packaged honey, traditional medicine and hair oil, plans to set up two new factories and introduce more products in Africa as part of a goal to almost double profit in three years.“It makes sense to move, spring out to other emerging markets, because competition these days is very hard in India,” Taina Erajuuri, a Helsinki-based fund manager with FIM Asset Management Ltd. said. “It’s easier for Dabur to go to emerging markets than developed markets because there you have Unilever, Procter & Gamble and L’Oreal.”
Dabur rose 0.1 percent to 103.7 rupees at the close of trading in Mumbai today. The stock has risen 3.4 percent this year, compared with a 12 percent drop in the benchmark Sensitive Index of the Bombay Stock Exchange.
Profitable Growth
“The Africa market is the epicenter of our growth prospects for the future,” Duggal said May 13. “The upsides in some of these markets are as much, if not bigger than India. I’m talking about not just revenue growth, but profitable growth.”
“There are markets where for another 20 years there may not be a significant growth,” Kulkarni said. “You’d find it very difficult to distribute products.” We’ll have to buy companies outside Africa and then seed the markets with those products or develop our own products.”
http://www.bloomberg.com/news
Blackstone Using the Same Formula to Convince Creditors Holding Debt
NNN Lease Market News
Blackstone now is using the same formula to convince creditors holding debt on other hotel investments by the firm, some likely worth less than their overall debt, to do similar restructuring deals.
Blackstone already has gone into the market and purchased junior, or "mezzanine," debt on these deals at a discount. The firm wants to retire that debt, and then convince the remaining mortgage holders to extend their loans' due dates in exchange for Blackstone paying a slice of the principal—usually about 5%—plus a small fee or higher interest rate.
The tactic is a reminder of the power that well-capitalized private-equity firms have in restructuring talks with lenders, particularly if they are willing to use their balance sheets. That gives them the power to go into the market and buy debt on their potentially stressed deals that already have been written down.
Moreover, the end game for some of Blackstone's hotel investments is likely an initial public offering. So far, though, that market remains unproven. Two hotel owners have sought IPOs of shares this year with tepid results.
http://online.wsj.com/article
Blackstone now is using the same formula to convince creditors holding debt on other hotel investments by the firm, some likely worth less than their overall debt, to do similar restructuring deals.
Blackstone already has gone into the market and purchased junior, or "mezzanine," debt on these deals at a discount. The firm wants to retire that debt, and then convince the remaining mortgage holders to extend their loans' due dates in exchange for Blackstone paying a slice of the principal—usually about 5%—plus a small fee or higher interest rate.
The tactic is a reminder of the power that well-capitalized private-equity firms have in restructuring talks with lenders, particularly if they are willing to use their balance sheets. That gives them the power to go into the market and buy debt on their potentially stressed deals that already have been written down.
Moreover, the end game for some of Blackstone's hotel investments is likely an initial public offering. So far, though, that market remains unproven. Two hotel owners have sought IPOs of shares this year with tepid results.
About
The Blackstone Group L.P. (Blackstone) is a manager of private capital and provider of financial advisory services. Blackstone is an independent manager of private capital with assets under management of $128.1 billion, as of December 31, 2010.
http://online.wsj.com/article
Tuesday, May 17, 2011
NNN Leased McDonald's
NNN Lease Market News
Calkain Companies Featured Listing (NNN) Lease McDonald's
Absolute NNN 20 Year Corporate McDonald's with 10% rent bumps every 5 years Zero Landlord Obligations. McDonald's Corporation operates over 31,300 restaurants in 118 countries. McDonald’s (S&P: A, NYSE: MCD) Triple Net (NNN) originally meant net of taxes, net of insurance, and net of maintenance. According to the terms of an absolute NNN, the tenant is responsible for all property operating expenses, including insurance, taxes and internal and external maintenance.
NNN properties offer the benefit of little or no management responsibilities, as the tenant pays for most, if not all, of the expenses depending on the terms of the lease. The investor receives the rent with little to no other involvement. With an absolute triple net lease, the tenant is responsible for all expenses, making this a true passive investment for the owner.
LEASE SUMMARY
Total NOI $136,000*
Tenants McDonald's & Marathon Petroleum
Guarantee Corporate
Lease Commencement March 2008
MCDONALD'S
NOI $65,000*
Rentable Square Feet 2,726 +/- sf
Lease Type NNN
Lease Term 10 years
Increases Percentage Rent & 10% increase in base rent beginning with the 2nd renewal option
Options Automatic Six (6), five (5) year
Includes percentage rent MARATHON PETROLEUM
NOI $71,000
Rentable Square Feet 3,040 +/- sf
Lease Type NNN
Lease Term 15 years
Increases 10% every 5 years
Options Automatic Five (5), five (5) year
HIGHLIGHTS
•Rent-to-Sales ratio of approximately 3%, growing sales year over year
•Corporate Backed Leases by McDonald's and Harper Oil
•15-year Accelerated Depreciation
•Only McDonald's within 20 mile radius Multiple Locations Nationwide
http://www.calkain.com/
Friday, May 13, 2011
Owner of the KFC fast-food chain, offered to take Little Sheep Group Ltd For $862 Million
NNN Lease Market News
Yum! Brands Inc., owner of the KFC fast-food chain, offered to take Little Sheep Group Ltd. (968) private in a deal that values the operator of hot pot restaurants in China at HK$6.7 billion ($862 million).
Su said in the same conference call that Yum believes Little Sheep has the potential to tap demand in overseas markets for hot pot, a type of cuisine in which various ingredients are cooked in a simmering pot by the diners. There is no specific expansion plan, he said.
“Yum will help to improve Little Sheep’s management skills and bring in more opportunities to tap the global market,” Titus Wu, an equity analyst at DBS Vickers (Hong Kong) Ltd., said by telephone from Hong Kong today. “It’s also good for Yum because it finally has a Chinese company in its global portfolio,” said Wu, who recommends buying Little Sheep’s stock.
The Chinese restaurant company’s 2010 net income gained 21 percent, according to a filing last month.
Little Sheep operated 179 self-owned restaurants and had 274 franchisees in mainland China, according to its 2010 annual report. Zhang reiterated today that the company plans to open 40 outlets this year.
http://www.bloomberg.com/
Yum! Brands Inc., owner of the KFC fast-food chain, offered to take Little Sheep Group Ltd. (968) private in a deal that values the operator of hot pot restaurants in China at HK$6.7 billion ($862 million).
Su said in the same conference call that Yum believes Little Sheep has the potential to tap demand in overseas markets for hot pot, a type of cuisine in which various ingredients are cooked in a simmering pot by the diners. There is no specific expansion plan, he said.
“Yum will help to improve Little Sheep’s management skills and bring in more opportunities to tap the global market,” Titus Wu, an equity analyst at DBS Vickers (Hong Kong) Ltd., said by telephone from Hong Kong today. “It’s also good for Yum because it finally has a Chinese company in its global portfolio,” said Wu, who recommends buying Little Sheep’s stock.
The Chinese restaurant company’s 2010 net income gained 21 percent, according to a filing last month.
Overseas Markets
“With a global network and rich experience in brand building, Yum will join hands with Little Sheep to explore feasible ways to introduce hot pot to overseas markets,” Su said.Little Sheep operated 179 self-owned restaurants and had 274 franchisees in mainland China, according to its 2010 annual report. Zhang reiterated today that the company plans to open 40 outlets this year.
http://www.bloomberg.com/
Thursday, May 12, 2011
Investors are Turning to Secondary Markets
NNN lease Market News
Investors are turning to secondary markets as credit availability improves and surging demand for properties in New York, Washington and San Francisco boosts prices and reduces returns in those areas. Cities such as Dallas and Houston are attracting real estate buyers because of the prospects for job and population growth, according to Robert Bach, chief economist for Grubb & Ellis Co., a Santa Ana, California-based broker.
“It’s a story of investors gradually embracing risk,” Bach said in a telephone interview. “They’re looking at other markets to deploy cash.” Prices for offices, the biggest part of the market, climbed 33 percent in New York and 21 percent in Washington in the fourth quarter from a year earlier, according to Moody’s Investors Service. That compared with a 1.7 percent gain nationally.
http://www.bloomberg.com/
Investors are turning to secondary markets as credit availability improves and surging demand for properties in New York, Washington and San Francisco boosts prices and reduces returns in those areas. Cities such as Dallas and Houston are attracting real estate buyers because of the prospects for job and population growth, according to Robert Bach, chief economist for Grubb & Ellis Co., a Santa Ana, California-based broker.
“It’s a story of investors gradually embracing risk,” Bach said in a telephone interview. “They’re looking at other markets to deploy cash.” Prices for offices, the biggest part of the market, climbed 33 percent in New York and 21 percent in Washington in the fourth quarter from a year earlier, according to Moody’s Investors Service. That compared with a 1.7 percent gain nationally.
http://www.bloomberg.com/
Tuesday, May 10, 2011
Triple Net (NNN) Leased Starbucks
NNN Lease Market News
Calkain Companies’, a national real estate investment brokerage firm, recently completed the sale of a 33,800 SF investment property ground leased to Starbucks on a long-term, NNN basis. The purchaser was a private investor seeking a passive, incoming-producing asset leased to a national tenant. The property is located at Edens & Avant’s Riverton Commons Super Wal-Mart and Lowes anchored center in Front Royal, Virginia. Other Ground lease parcels are also available for sale.
Calkain Companies’, a national real estate investment brokerage firm, recently completed the sale of a 33,800 SF investment property ground leased to Starbucks on a long-term, NNN basis. The purchaser was a private investor seeking a passive, incoming-producing asset leased to a national tenant. The property is located at Edens & Avant’s Riverton Commons Super Wal-Mart and Lowes anchored center in Front Royal, Virginia. Other Ground lease parcels are also available for sale.
Calkain’s Rick Fernandez and Rich Murphy brokered the transaction on both the sell and buy side respectively. Calkain worked with the buyer to develop criteria for acquiring a portfolio of properties that would fit the client’s investment strategy. “Knowing the buyer’s criteria, it was a matter of finding an attractive property at the right price point,” says Murphy. “This property just happened to be a Calkain listing,” adds Murphy. “This Starbucks deal represents the type of stable asset that investors are focused on purchasing in the current environment.” Fernandez said.
Single Tenant NNN properties are typically free standing buildings that are leased to a single business tenant for a long term, often 10-25 years. Triple Net (NNN) originally meant net of taxes, net of insurance, and net of maintenance. According to the terms of an absolute NNN, the tenant is responsible for all property operating expenses, including insurance, taxes and internal and external maintenance.
NNN properties offer the benefit of little or no management responsibilities, as the tenant pays for most, if not all, of the expenses depending on the terms of the lease. The investor receives the rent with little to no other involvement. With an absolute triple net lease, the tenant is responsible for all expenses, making this a true passive investment for the owner.
Starbucks is the premier roaster and retailer of specialty coffee in the world, operating in more than 50 countries. Starbucks Corporation was formed in 1985 and its common stock trades on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “SBUX.”
The transaction closed within the last thirty days and is recorded in the public record.
Calkain is a full service real estate brokerage firm with a national scope focusing on single and multi-tenant retail, industrial, hotel and office net-leased transactions. Calkain has offices in Reston, VA (Washington, DC), Florida, Maryland and Delaware. Additional information about the firm and its listings may be found at http://www.calkain.com/
NNN Lease Market: Real Estate Market Takes a Tumble
NNN Lease Market: Real Estate Market Takes a Tumble: "NNN Lease Market News Home Market Takes a Tumble Turnaround More Distant After 3% Drop, Steepest Quarterly Decline Since 2008 According to..."
Real Estate Market Takes a Tumble
NNN Lease Market News
Last year, the housing market showed signs of improving as price depreciation slowed in some markets and stabilized in others. In response, a number of economists began forecasting that housing would hit a bottom in late 2011, then begin to recover. But the improvements, spurred by federal programs that gave buyers up to $8,000 in tax credits, proved fleeting. Sales collapsed when the credits expired last summer, and prices in many markets have been falling ever since.
http://online.wsj.com/article
Home Market Takes a Tumble
Turnaround More Distant After 3% Drop, Steepest Quarterly Decline Since 2008
According to the Zillow index, a handful of California markets and Washington, D.C., saw price appreciation last year, but that has since reversed. Mr. Humphries attributes the "double dip" in those markets, which include Los Angeles, San Francisco and San Diego, to the way in which the tax credit stimulated demand from buyers. When the tax credit went away, markets were left with rising supply from foreclosures but with less demand from buyers.Last year, the housing market showed signs of improving as price depreciation slowed in some markets and stabilized in others. In response, a number of economists began forecasting that housing would hit a bottom in late 2011, then begin to recover. But the improvements, spurred by federal programs that gave buyers up to $8,000 in tax credits, proved fleeting. Sales collapsed when the credits expired last summer, and prices in many markets have been falling ever since.
http://online.wsj.com/article
Friday, May 6, 2011
Transition From a Recovery Phase to Expansion in the Commercial Real Estate Market
Industry leaders discussed the transition from a recovery phase to expansion in the commercial real estate market during a panel at the Real Estate Luminaries Series event on May 3 at Georgetown University. The event was sponsored by NAREIT and Georgetown’s McDonough School of Business.
Cohen emphasized that while the federal government helped in recovery efforts, the public market ultimately came to the industry’s rescue.
“The public market saved the industry, and the same thing happened in other cycles,” said Cohen, adding that the public market’s securitization of capital and development of new companies was a boon to the industry.
http://www.reit.com/
Cohen emphasized that while the federal government helped in recovery efforts, the public market ultimately came to the industry’s rescue.
“The public market saved the industry, and the same thing happened in other cycles,” said Cohen, adding that the public market’s securitization of capital and development of new companies was a boon to the industry.
http://www.reit.com/
NNN Lease Market: The Largest Buildings in Washington DC For Sale!!
NNN Lease Market: The Largest Buildings in Washington DC For Sale!!: "NNN Lease Market News A family-owned company has put one of the largest buildings in Washington on the block, hoping to fetch as much as $..."
The Largest Buildings in Washington DC For Sale!!
NNN Lease Market News
A family-owned company has put one of the largest buildings in Washington on the block, hoping to fetch as much as $900 million for the property in what has been one of the hottest office markets in the country.
But the timing of the offer by David Nassif Associates may not turn out to be as good as it looks. Until now, the Washington market has outperformed those in most other cities, thanks to strong demand from government agencies and contractors.
But, with pressure building to lower the national deficit, the government is moving into a contraction mode and real estate has become one of the targets of the budget ax. Last year, President Barack Obama directed federal agencies to accelerate efforts to eliminate unneeded properties, setting a goal of saving $3 billion by the end of 2012.
The building was built in the 1960s by the father and grandfather of David W. Nassif and served as the Department of Transportation headquarters until the agency moved out in 2007. At the height of the market, the owners spent about $300 million to redevelop the building without a tenant in hand. But the building has remained empty since it was completed at the end of 2009.
http://online.wsj.com/article
A family-owned company has put one of the largest buildings in Washington on the block, hoping to fetch as much as $900 million for the property in what has been one of the hottest office markets in the country.
But the timing of the offer by David Nassif Associates may not turn out to be as good as it looks. Until now, the Washington market has outperformed those in most other cities, thanks to strong demand from government agencies and contractors.
But, with pressure building to lower the national deficit, the government is moving into a contraction mode and real estate has become one of the targets of the budget ax. Last year, President Barack Obama directed federal agencies to accelerate efforts to eliminate unneeded properties, setting a goal of saving $3 billion by the end of 2012.
The building was built in the 1960s by the father and grandfather of David W. Nassif and served as the Department of Transportation headquarters until the agency moved out in 2007. At the height of the market, the owners spent about $300 million to redevelop the building without a tenant in hand. But the building has remained empty since it was completed at the end of 2009.
http://online.wsj.com/article
Monday, May 2, 2011
The story of Cap Rate Movement in 2010
NNN Lease Market News
The story of cap rate movement in 2010 is a tale of two trends. Beginning with promise and an increase in NNN deal making, the year quickly faded in the wake of poor global economic news – only to rebound and rally around mid-year in select markets (headlined by New York and Washington D.C.). Overall, cap rates in the second half of the year were lower than the first. In fact, sellers of credit rated NNN properties in core markets closed at cap rates rivaling the 2007 peak of the market. Numerous reasons have been offered as the cause but chief among these were a lack of quality supply, a more positive lending environment and improving market fundamentals.
It is no secret that there was dramatic contraction in development over the past two years. The pause in expansion by national retailers coupled with stagnant retail sales and the tight debt market all but encouraged already wary developers to halt or slow projects slated for development. Those eager to invest quickly discovered that NNN properties were in short supply and properties of real quality in strong primary markets were even rarer still. In early summer, these factors created a dwindling pool of quality investment grade NNN assets.
http://www.calkain.com/
The story of cap rate movement in 2010 is a tale of two trends. Beginning with promise and an increase in NNN deal making, the year quickly faded in the wake of poor global economic news – only to rebound and rally around mid-year in select markets (headlined by New York and Washington D.C.). Overall, cap rates in the second half of the year were lower than the first. In fact, sellers of credit rated NNN properties in core markets closed at cap rates rivaling the 2007 peak of the market. Numerous reasons have been offered as the cause but chief among these were a lack of quality supply, a more positive lending environment and improving market fundamentals.
It is no secret that there was dramatic contraction in development over the past two years. The pause in expansion by national retailers coupled with stagnant retail sales and the tight debt market all but encouraged already wary developers to halt or slow projects slated for development. Those eager to invest quickly discovered that NNN properties were in short supply and properties of real quality in strong primary markets were even rarer still. In early summer, these factors created a dwindling pool of quality investment grade NNN assets.
http://www.calkain.com/
Select Markets Have Already Experiences Noticeable Cap Rate Compression
NNN Lease Market News
According to ISCS, a total of 700 U.S. stores and restaurants – 10.4 million square feet and .07% of retail space – closed this quarter. A 53% decreased from the year before. This has been connected to a 3.3% increase in shopping center sales last year. 2010 did witness a 7.5% increase in GAFO closures over 2009. However, the latter half of 2010 experienced significant improvement. This improvement has trended into 2011.
High quality net lease properties in select markets have already experiences noticeable cap rate compression. Whether or not this trend spreads throughout the greater retail market is uncertain.
http://www.calkain.com/
According to ISCS, a total of 700 U.S. stores and restaurants – 10.4 million square feet and .07% of retail space – closed this quarter. A 53% decreased from the year before. This has been connected to a 3.3% increase in shopping center sales last year. 2010 did witness a 7.5% increase in GAFO closures over 2009. However, the latter half of 2010 experienced significant improvement. This improvement has trended into 2011.
High quality net lease properties in select markets have already experiences noticeable cap rate compression. Whether or not this trend spreads throughout the greater retail market is uncertain.
http://www.calkain.com/
Wal-Mart Stores are rare Investments on The Net Lease Market
Wal-Mart discount department stores vary in size from 51,000 square feet to 224,000 square feet, with an average store covering about 102,000 square feet. Wal-Mart Supercenters stock everything a Wal-Mart discount store does, and includes a full-service supermarket. Wal-Mart Supercenters vary in size from 98,000 to 261,000 square feet, with an average of about 197,000 square feet. Wal-Mart has displayed exceptional growth over the past decade and its AA S&P investment grade credit rating carries strong appeal for real estate investors.
Wal-Mart stores are rare investments on the net lease market with the transaction size, acreage and square footage of the investment (much larger on all counts than the typical netlease property) appealing to a more select group of investors. Big annual rents and relatively low selling cap rates means the typical net lease Wal-Mart transaction is over $10mm. The selling cap rate is often in the low 6's to high 7's depending on lease structure and remaining term.
http://www.calkain.com/
Wal-Mart stores are rare investments on the net lease market with the transaction size, acreage and square footage of the investment (much larger on all counts than the typical netlease property) appealing to a more select group of investors. Big annual rents and relatively low selling cap rates means the typical net lease Wal-Mart transaction is over $10mm. The selling cap rate is often in the low 6's to high 7's depending on lease structure and remaining term.
http://www.calkain.com/
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