The Biggest U.S Pizza Hut Franchisee is for Sale

NNN Lease Market News

BofA to Seek $800M in Deal to Sell Pizza Assets

Bank of America Corp. (BAC), the lender divesting assets to raise capital, is in exclusive talks to sell its stake in the biggest U.S. Pizza Hut franchisee for more than $800 million, said two people with knowledge of the discussions.Bank of America accelerated asset sales amid concern that the firm, which reported a record $8.8 billion second-quarter loss, will have to issue stock to bolster capital. The lender has lost more than half its market value this year. Moynihan has said repeatedly that the bank will reach capital targets by divesting assets deemed less important to customers, rather than issuing shares or divesting core units.Last month, the bank announced deals to divest a Canadian credit-card unit for C$7.5 billion ($7.3 billion) and sell about half its stake in China Construction Bank Corp., the world’s second-biggest lender by market value, for $8.3 billion in proceeds.

Two private-equity firms teamed up to bid for NPC International Inc., which operates 1,140 Pizza Hut restaurants, said the people, who declined to be identified because the talks are confidential. One hurdle in closing the transaction is arranging debt financing for Overland Park, Kansas-based NPC as credit markets for buyouts tighten, the people said.

http://www.bloomberg.com

NNN Commercial Real Estate Properties Prices Up !!!

NNN Lease Market News


NNN Commercial Real Estate Prices in U.S. Increased 5% in July


U.S. commercial real estate prices rose for a third straight month in July as deals for smaller properties led a rebound that may stall as the economy slows, according to Moody’s Investors Service.

Demand had increased for real estate outside of major cities such as New York before a recent slowdown in CMBS lending. The CMBS slump may hurt demand for non-distressed building sales of less than $10 million in metro areas outside U.S. cities where real estate is most sought after, Tad Philipp, director of commercial real estate research at Moody’s, said in a telephone interview. These deals accounted for 60 percent of July repeat sales, Moody’s said.
“The CMBS market largely is a main source of financing for the middle market,” Philipp said.
A gain in commercial-property values may be held back by buyers making more conservative estimates for rent increases and leasing amid slow job growth, according to the report.
“Price increases in the near term are likely to be earned the old-fashioned way, by rent growth, rather than through higher leverage or financial engineering,” Moody’s said.
Green Street Advisors Inc., a real estate research company in Newport Beach, California, reported commercial property values rose 1 percent in August from the previous month and advanced 18 percent from a year earlier.

http://www.bloomberg.com/news

What NNN Investors Really Really Want

NNN Lease Market News

Grocery Shopping Centers Lure Buyers as $200 Million U.S. Venture Formed

Phillips Edison-ARC Shopping Center REIT Inc., a Cincinnati-based company that isn’t listed on an exchange, will contribute $52 million to the partnership, and clients of CBRE Investors will put in $50 million, the REIT said today in a statement. They will borrow about $102 million for U.S. deals.
Retail centers with supermarkets are attracting investors because of the perceived safety of properties that consumers have to visit for necessities in a slow-growing economy. Sales of such real estate in the first half of the year exceeded the total for all of 2010, according to research company Real Capital Analytics Inc.
About $5.58 billion of grocery centers were sold this year through the second quarter, 22 percent more than the $4.57 billion in all of 2010, according to New York-based Real Capital. The 2011 total is the highest since 2007, the peak of the commercial real estate market.
Supermarket-anchored centers haven’t been immune to the economic slowdown. Vacancy rates have risen as local retailers, such as dry cleaners and restaurants, have gone out of business. Reduced access to capital has prevented other stores from taking up their space.

http://www.bloomberg.com/news

Realty Income (REIT) Completes Sale and Leaseback Transaction

NNN Lease Market News

RESTON, VA-Realty Income (NYSE: O), an Escondido, CA-based REIT, has acquired a 12-asset owner occupied industrial portfolio located across the US in a sale leaseback transaction, Calkain Cos., tells GlobeSt.com in an exclusive interview. The purchase price, value of the real estate portfolio and seller are not disclosed, Calkain’s EVP David Sobelman tells GlobeSt.com. “The size of the portfolio is 300,000-square feet but other than that, due to the confidentiality clause, there is little else we can disclose.”

That said, the transaction, between institutional investors, is a significant one - as well as illustrative of a growing trend Sobelman has noted: the use of sale leasebacks as a way for buyers of properties to monetize recent acquisitions as quickly as possible. “I would say this is definitely something we are seeing more and more of, especially among private equity firms,” he says.

This particular trade began as an acquisition by a private equity company based in the Southeast, of an environmental services company that owned and occupied 12 industrial facilities in eight states. “Because of its business model the private equity company did not want to keep the real estate,” Sobelman says. “Instead it realized that the real estate portfolio could pay back a significant portion of its initial investment through a sale leaseback transaction.”

A sale leaseback is very simple really. Sometimes known as a sale leaseback or sale and leaseback, it is a transaction wherein the owner of a property sells that property and then leases it back from the buyer. The purpose of the leaseback is to free up the original owner's capital while allowing the owner to retain possession and use of the property. The type of property involved can be anything from residential or commercial real estate to equipment or vehicles.
A leaseback can be beneficial for the buyer and seller alike. The seller attains a lump sum of cash quickly and the buyer acquires a lower than market value purchase price, along with a long-term lease at a premium rate. The lease amount provides periodic income and may even be enough to pay the buyer's mortgage, if he or she borrowed money to obtain the property. A leaseback can be a great investment tool, one that yields a high return. As with any investment, however, there are associated risks.

The private equity company retained Calkain, which brokered the deal with Realty Income. “Because of the number of locations and their geographic distribution we knew that private investors would not be interested in a portfolio like this. It would have to be a REIT or another institutional investor,” Sobelman says.

http://www.calkain.com/

Rush to Restaurant Real Estate Brings 53% Increase in Valuation

NNN Lease Market News

Rush to Restaurant Real Estate Brings 53% Increase in Valuation: Real M&A

The 10 biggest U.S. restaurants that sell for less than the value of their property, plants and equipment trade at 70 cents on the dollar, according to data compiled by Bloomberg. With the restaurants slumping twice as much as the Standard & Poor’s 500 Index this year, firms from Biglari Holdings Inc. (BH) to Carlson Capital LP and Becker Drapkin Management LP are agitating for board seats at eateries with fixed assets that are worth an average of 53 percent more than the companies themselves. Ruby Tuesday has $1 billion of such assets, twice its market value.
The economy expanded 0.7 percent in the first half of this year, the weakest stretch since the recovery began in June 2009. As job growth stalled last month, a RBC Capital Markets survey showed one-third of Americans now plan to spend less dining out in the next 90 days, the largest proportion in almost a year.
Ruby Tuesday, valued at $459 million after plummeting 44 percent this year, sells for the biggest discount to its net fixed assets. Cracker Barrel has about $1 billion in land and buildings, exceeding its market capitalization by 16 percent after the company lost almost a third of its value.

http://www.bloomberg.com/news

Restaurant Stocks Reflect U.S. Spending

NNN Lease Market News

Restaurant Stocks Reflect U.S. Spending Doubt, Signaling Fed May Ease More...

Full-service chains owned by Darden Restaurants Inc. (DRI) andBrinker International Inc. (EAT) are underperforming as investors bet on a slowdown in dining out, a signal to the Federal Reserve to do more to bolster consumption.
“Both sectors are down, and this shows the stock market is concerned we’re either in for a double-dip recession or at least another slowdown,” Hooper said. “If the market is right, full- service restaurants, because they are more discretionary than quick-service, will take the brunt of weaker consumer spending.”

This is “a signal by investors to the Fed that additional monetary accommodation is needed to support the U.S. consumer,” said David Rosenberg, the chief economist at Gluskin Sheff & Associates in Toronto. With a deteriorating labor market deterring purchases, “investors are concerned that consumer frugality may take on a new head of steam, which helps explain why full-service eateries are falling out of favor now.”

Lululemon Envy Has Chains From Gap to Nordstrom Pushing Yoga

NNN Lease Market News

Gap, Nike and Nordstrom may have something in common: Lululemon envy. Seeking to lure shoppers willing to spend $98 on stretchy yoga pants, these retailers are mimicking the strategy of Lululemon Athletica Inc. (LULU), the sports apparel company known for its pricey yoga gear.

Nike Inc. (NKE)’s Salvation chain of athletic-wear stores is selling $64 training capris and features a yoga-studio format similar to that of Lululemon. Gap Inc. (GPS)’s Athleta stores sell $60 women’s yoga tops and offer free yoga classes -- another Lululemon innovation.Nordstrom Inc. (JWN)’s Zella line, dedicated to yoga attire, hired a Lululemon alum to introduce the effort.

http://www.bloomberg.com/news

Investors have Shown a Willingness to Close at Cap Rates

NNN Lease Market News

By Winston Orzechowski,
Research Director, Calkain Cos.
Calkain’s investors have shown a willingness to close at cap rates ....

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.
High quality credit rated net leases have routinely sold for caps below 7 percent and when the combination of tenant, location and market align, Calkain’s investors have shown a willingness to close at cap rates (Calkain closed a bank/pharmacy deal below a 5.9 percent cap) that rival the peak of the market. We saw the same thing happen in the last half of 2010 and if that trend continues, it is likely that – buoyed by the improving economy – other triple-net-lease asset types will see a compression in cap rates as investors look to jump into the market rather than await the delivery of new product.
Pharmacies
High-quality pharmacies such as Walgreens have long been the poster boy for net-lease properties. As a result, pharmacies continued to outperform the overall net lease average — 7.56 percent to 7.75 percent. However, it should be noted that the highest-quality pharmacies enter the market in the mid 6 cap range while the weaker performers in the pharmacy segment round out the cap rate average with significantly higher closing cap rates.
Banks
Not surprisingly, banks continue to have the lowest cap rate. Their average is far lower than the overall net-lease average, moving between 6.47 percent and 7.75 percent. The sector tends to have the strongest credit tenants overall and are most commonly traded as ground leases with regular rental increases over both the initial and renewal terms.
Quick-Service Restaurants
QSR cap rates declined from 2010 to 2011, moving from 7.65 percent to 7.42 percent, and are lower than the overall average, which moved from 7.42 percent to 7.75 percent. However, the average cap rate of 7.42 percent is not totally illustrative of credit tenant transactions with the corporate guarantee of McDonalds, Chik-Fil-A, or Yum Brands-tenanted properties – many of which trade in the low 6s. Furthermore, it should be noted that much of the QSR’s that are trading garner a higher cap rate because the tenant is a local or regional franchisee whose lack of strength as a guarantor is reflected in the higher closing cap rate.
Dollar Stores
Though higher than the net lease average – 8.63 percent to 7.75 percent – dollar-store cap rates have witnessed a precipitous decline. Between 2010 and 2011, they fell from 9.29 percent to 8.63 percent. This is not a surprise. Dollar stores continue to gain market share coming out of the recession. Look for lower executions of dollar stores as the summer progresses. Furthermore, Dollar General has moved to a more favorable triple-net-lease, driving cap rates down. Dollar General is also expanding in markets that are less rural, with better real estate fundamentals. There are also rumors that Dollar Generals credit is improving.
Causal Dining
Casual Dining observed a slight increase from 2010 to 2011, raising from 8.24 percent to 8.39 percent. This could be caused by a variety of factors. Most restaurant leases are franchisee not corporate guaranteed, increasing the cap rate. This segment is also not recovering from the recession as well as others with consumers showing a preference for the lower priced menus offered by the QSR segment. Shopping center vacancies have also had an impact on the sector due to decreased traffic at the center.
Big Boxes
Big boxes observed a definite cap rate decrease from 2010 to 2011 — 8.52 percent to 7.97 percent — with transactions in strong key markets closing significantly lower. While the tenants have strong appeal and often carry a solid credit rating, the transaction size, acreage and square footage of the investment (larger on all fronts than the typical net-lease investment) means that there is a more select pool of eligible investors for properties in this sector. The sector has displayed exceptional growth in the past decade and the performance of the retailers in this segment has found a new strength driven by an improving economy and consumer spending.

The Phenomenon of the NNN Investments

NNN Lease Market

 Calkain Reston office, says retail transactions make up the bulk of NNN investments..

NNN Investments, the phenomenon that allows a landlord to defer all of the owners’ traditional responsibilities to a tenant, has taken over as an investment of choice for both private investors and institutional buyers. By having all management/maintenance, taxes and insurance, (hence the three (3) nets) taken away from a landlord’s daily tasks and given directly to the tenant to handle, allows for the most passive form of real estate investment for a sole owner in today’s market. Most NNN invstment assets fall into a few categories; office, industrial or retail buildings.

 Retail transactions make up the bulk of NNN investments. The drug store on the corner, restaurants along the busy street and bank branches in front of the new supermarket are all some of the most popular investments. But exactly what is one purchasing when the decision is made to become a passive real estate investor? With NNN investement properties, three considerations, in this specific order, must be analyzed before an investment is procured; the intrinsic value of the real estate, the tenant’s credit and the lease terms. First, the real estate or the location of the property. We cannot forget that we are still investing in real estate. The cliché adage of "location, location, location" does not go away just because there is income attached to a property. Even large, public companies go out of business. We've seen many examples in recent years. Therefore, we have to understand the value of the property without a tenant and the feasibility of attaining a new tenant if the current rent-payer decides to leave at any point. Next, the actual tenant that is in place for a particular property may dictate the value of that property.

The difference between a high Standard & Poors (S&P) rated company as a tenant and a local "Mom and Pop" operator is usually vast. Meaning the probability that the S&P rated company defaulting on their lease is lower and therefore a landlord can be more assured of receiving their rent from that tenant for a longer period. Conversely, if the Mom and Pop operator had a couple of bad months, they could close indefinitely. Lastly, the terms of the lease are important to an investor. The most sought after leases are absolutely passive to the landlord where, in most cases, they receive a wire transfer from the tenant each month and never so much as receive a phone call about the property. There are many variations on NNN net leases , but those with the most passivity garner the lowest returns because there is little to no work involved for the landlord.

http://www.calkain.com/

Sold Just Closed NNN Investment in Newport News, VA

 NNN Lease Market News

La-Z-Boy Furniture NNN Investment Sale in Newport News, VA

Calkain Companies', a national real estate investment brokerage firm, recently completed the sale of a 16,510 SF showroom leased to La-Z-Boy Furniture Galleries of Washington DC, Inc on a long-term, NNN basis. The purchaser was a local investment group seeking a passive, incoming-producing asset. Being local, the purchaser was attracted to the stable Newport News market and the performance of the store. The 1.52 acre property is located at 11967 Jefferson Avenue, Newport News, Virginia.
Calkain's Bob Browning and Andrew Fallon brokered the transaction, providing exclusive representation to the seller of the showroom facility.  La-Z-Boy, the long-term tenant of this property, recently renewed their lease and made significant improvements to the building and showroom area.  Browning & Fallon commented, "The capital investment and lease term commitment that La-Z-Boy made indicated the strength of this location and market." The transaction closed within the past thirty days and is recorded in public record. A NNN Investemnt  is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three 'Nets') on the property in addition to any normal fees that are expected under the agreement (rent, etc.). In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any common area.
This form of lease is frequently used for commercial freestanding buildings. However, it has also been used in single family residential rental real estate properties.

Calkain is a full service real estate investment brokerage firm with a national scope focusing on single and multi tenant retail, industrial, hotel and office net-leased transactions as well as asset management, tax planning, and advisory services.  Calkain has offices in Reston, VA (Washington, DC), Tampa, FL, Bethesda, MD, Wilmington, DE and Boston, MA.  Additional information about the firm and its listings may be found at http://www.calkain.com/

NNN Public Offering of 8 Million Shares

NNN Lease Market News

National Retail Properties, Inc. (NNN) recently issued a public offering of 8 million shares at an average price of $26.07 per share. As a part of the offering, the underwriters have an option of purchasing additional 1.2 million shares within a time period of 30 days.
Consistent with its investment objectives and strategies, National Retail intends to utilize the proceeds generated from the offering to acquire additional assets and repay debts under its credit facility and for other general corporate purposes.
This public offering will enable the company to attain financial flexibility and seize investment opportunities and acquisitions, which go a long way in enhancing top-line growth.

A NNN Investemnt  is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three 'Nets') on the property in addition to any normal fees that are expected under the agreement (rent, etc.). In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any common area.
This form of lease is frequently used for commercial freestanding buildings. However, it has also been used in single family residential rental real estate properties.

Gyms Working Out for the NNN Lease Market

NNN Lease Market News

Gyms Working Out for Landlords

The influx of health clubs comes at a time when retail landlords are scrounging for new tenants to offset a pullback among many traditional retailers. Retail vacancies in the top 80 U.S. markets remain near multiyear highs, reaching 11% for neighborhood shopping centers and 9.3% for regional malls in the second quarter, according to Reis Inc.
What is more, the costs for landlords of setting up a health club's facilities aren't onerous, roughly matching that of retailers in many cases, landlords say.
"Generally, health clubs are pretty good rent payers, in the sense that you will be able to recapture your [set-up] costs as part of the rent," says Michael Pappagallo, chief operating officer of Kimco Realty Corp., which owns stakes in 900 shopping centers in North America. "They're paying market rents for the space."

Gold's, with 500 U.S. gyms either owned by the company or franchised, intends to open 17 gyms this year and 30 next year.
Other rapidly growing health-club chains include L.A. Fitness International LLC, which intends to expand its stable of 370 clubs by opening 50 in each of the next five years. Global Fitness Holdings LLC's Urban Active is looking to add seven to 10 new clubs to its 37 by the end of 2012.

http://online.wsj.com/article

State of the Net Lease Market

Long-Term Leases is a Healthy Trend in The Retail Sector Market

NNN Lease Market News

Brokers Say Commercial Retail Market Stabilizing In Aspen...

The downtown commercial core is nearly full, with a vacancy rate reaching pre-recession percentages.
About 30 retail leases have commenced in the past year, which is more than the usual handful that occur annually, said commercial real estate broker Karen Setterfield.
The market is very, very tight right now,” he said. “There are very few spaces available. A year ago you had your selection to pick from and there were deals to be made. There are no more deals.”
Commercial brokers also agreed that rent prices have stabilized and as a result, the pop-up retail stores that once were popular in the local market are no longer a viable option for prospective renters. Pop-up retail is a trend of opening short-term stores, which are known for their spontaneity .The pop-up concept is something that thrived in Aspen over the past couple of years in response to the Great Recession when landlords were willing to tolerate short-term, discounted leases in order to keep their buildings full, said Kruger. But now that the market is stabilizing and there are fewer options for prospective renters, landlords no longer need to rely upon them, she said.

The shift toward long-term leases is a healthy trend in the retail sector, Kruger said, noting that pop-up businesses are a short-term solution but not necessarily good for the marketplace in the long run.


http://www.aspendailynews.com/

NNN Lease Market: NNN Investment Properties one of the most Passive ...

NNN Lease Market: NNN Investment Properties one of the most Passive ...: NNN Lease Market News Experienced, savvy and sophisticated real estate investors typically are inundated with decisions of what to do with ...

NNN Investment Properties one of the most Passive Forms of Real Estate

NNN Lease Market News

Experienced, savvy and sophisticated real estate investors typically are inundated with decisions of what to do with their existing assets as they plan their estates.  In many cases, individuals holding various types of real property may want to simplify their portfolios for the next generation for ease of administration and enjoyment. (NNN) investments (“NLIs”) are one of the most passive forms of real estate (NNN )investment.  Under an NLI arrangement, the investor purchases the real property subject to a (NNN) investmets.  In such case, the tenant is responsible for paying all of the taxes, insurance, and most importantly, the maintenance of the real property.  By divesting of current real estate holdings and purchasing an NLI, the investor can ultimately simplify the investor’s real estate portfolio and have the ability to transfer assets to the investor’s beneficiaries with the comfort of understanding that little to no real estate experience will be required in order to manage the NLI. Additionally, depending on the type of asset purchased, the investor can assist in providing the investor’s heirs with (a) an income stream that extends into the future; and (b) an appreciating capital asset.

Investors concerned with the potential tax burdens associated with the sale of their existing real estate (NNN )investments may consider taking advantage of the tax-deferred exchange provisions of Internal Revenue Code Section 1031 in order to effectuate their diversification into NLIs.  Through the implementation of a properly structured tax-deferred exchange, investors can sell maintenance-intensive real property (NNN) investments, defer the taxable gains on such sales and reinvest the proceeds in an NLI.  Throughout the remainder of the investors’ lives, they can continue to enjoy the income stream and appreciation afforded by an NLI.  Should a particular investor continue to maintain their (NNN) investment in the NLI until death, the investor’s estate will receive a step-up in basis in the NLI to its fair market value as of the date of the investor’s death, thereby eliminating all of the deferred income tax on such real estate (NNN )investment.  Thereafter, the investor’s beneficiaries receive the following benefits: (a) a real estate (NNN)  investment; (b) an income stream subject to the terms of the NLI; and (c) an asset in which they possess a relatively high basis such that if they sell the NLI in the future, they can minimize the taxes paid in connection with such sale (or, if properly structured, such taxes can be deferred through a subsequent 1031 exchange).

Case Study:

Situation

For over 40 years a private investor had amassed a portfolio of New York real estate encompassing over 3,800 multifamily units.  Over the four decades, the investor had personally managed and operated the portfolio with a small team of staff and advisors.  Now in his late 60’s and with no heirs willing to undertake the management-intensive nature of the holdings, the investor was looking to gradually simplify his assets while maintaining a level of passive income that could be easier to pass on to heirs.

Problem

The size of the investor’s portfolio made it more challenging to find one single buyer since the assets are valued at approximately $420 million.  Additionally, the sale of the assets, if not properly timed, would have triggered a substantial capital gain that would have drastically affected the net proceeds for the investor.

Solution

Staggering the sale of the assets within the portfolio to allow for much smaller dispositions and encourage an ultimately higher sale price, due to increased competition, would allow the investor the opportunity to use the 1031 tax deferred exchange code in order to find like-kind assets to purchase.  The assets found for the exchange were real property occupied by tenants who signed long-term(NNN) triple net leases, were priced in the $2 – 10 million range and had a large scope of geographic diversification.  Therefore, the passive income attained from the newly acquired assets coupled with the use of the 1031 tax code allowed the investor the comfort to plan for future generations’ passive income as well as eliminated the immediate capital gains taxes he would have realized.

Authors’ Biographical Information

Benjamin R. Hanan is a Shareholder in the Business & Corporate Counseling, Personal Services & Planning and Employment Law Practice Groups at Abel, Band, Russell, Collier, Pitchford & Gordon, Chartered. Also a Certified Public Accountant, Mr. Hanan focuses his law practice on corporate law and business transactions involving individuals, physician practices, and other entities, including entity formation, operation, business sales, mergers and acquisitions, employment arrangements, buy-sell arrangements, and equity owner agreements. Mr. Hanan also devotes a substantial portion of his practice to estate planning and family wealth transfers.

Mr. Hanan earned his Juris Doctorate degree, with highest honors, from The George Washington University Law School in Washington, D.C. Mr. Hanan attended the University of Texas at Austin, where he earned an undergraduate degree in accounting, with highest honors, and a Masters degree in professional accounting.

www.calkain.com

NNN Investments One-Liner

NNN Lease Market News

NNN Industrial Investments One-Liners

Calkain Companies is a dedicated team of seasoned professionals that is committed to excellence in the sale of  NNN industrial investments properties. 

Don’t lose sight of the fundamentals: 

• The length remaining on the lease term may not be as important as the location and the use of the property. An opportunity to renew or release could be a benefit to investors, especially if the underlying real estate meets the long term requirements of the tenant or use group.

• All things being equal, should the investments value of a property with a stable, high quality industrial tenant, who is operating with a short lease term, be overlooked or discounted? If the business model of the tenant shows creditable future growth and the site and location are critical to their operation, the investments has value beyond the initial lease term.

• Should the real estate be as equally important to the equation, as lease term and financial strength? All attributes of a NNN investments play a critical role in determining the true value if the asset and in some special cases, the value of the real estate may be as important as the strength of the tenant and the uniqueness of the location.

• The location, zoning and uniqueness of the property will always add to the real estate value. The tenant’s use of the real estate and their special requirements can make a case for a much higher value of the intrinsic real estate.

• Spending the time to quantify the real estate value with special consideration put on permitted use requirements and necessary equipment in place, can make or break a NNN deal even if the financial fundamentals say differently.

• Should savvy NNN industrial investors consider the real estate as just one factor of a NNN investments or the most critical component of the equation? In a NNN transaction, real estate having necessary site specific requirements to the Tenant’s business operation, it should disproportionately add value to unattractive real estate.

NNN Lease Investors Remain Enamored With Walgreens & CVS Caremark

NNN Lease Market News

NNN Lease Investors Remain Enamored With Walgreens & CVS Caremark

Net lease investors can’t seem to get enough of the drugstore sector with sales today being driven by a desire among both lenders and buyers for low risk assets with a steady income stream.

According to a report on the second-half outlook for net lease properties from Marcus & Millichap Real Estate Investment Services, drugstore sales were up 10 percent, supporting a 3 percent rise in the median price for the sector to $334 per square foot.

http://retailtrafficmag.com/