Wendy's Dethroning The King

NNN Lease Market News


Wendy’s has dethroned Burger King as the country’s second-biggest hamburger chain.


Wendy’s edged out Burger King in U.S. sales volume for the first time last year since Wendy’s was founded in 1969, according to a report by the food industry research firm Technomic Inc. that is set to be released next month.
Wendy’s had sales of $8.5 billion in 2011, compared with $8.4 billion for Burger King. McDonald's remained far larger than both with $34.2 billion in sales.
The figures are based on Technomic’s estimates of systemwide sales at franchise and company-owned restaurants, rather than corporate revenue, which includes fees from franchise operators. 
Worldwide, Burger King still has far more restaurants than Wendy’s and remains the second-biggest hamburger chain behind McDonald's.




http://www.washingtontimes.com

NNN Investment Sale of McDonald's Ground Lease in Maple Lawn, MD

NNN Lease Market


NNN Brokers 4.75% Cap Rate  McDonald’s on a long-term, NNN lease basis.



Calkain Companies, a national real estate investment brokerage firm, recently completed the sale of an investment property ground leased to McDonald’s on a long-term, NNN lease basis. The purchaser was a private investor seeking a passive, incoming-producing asset leased to a strong national credit tenant. The property is located within the Harris Teeter anchored retail square of the award winning Maple Lawn development, a beautiful mixed-use community in Fulton, Maryland.

Calkain’s Rick Fernandez brokered the transaction for the seller. “Favorable lease terms from an investment grade tenant at the vanguard of its retail sector and NNN lease investments anchored to a growing retail market provided an irresistible combination of factors that drew investors from all over the globe,” Fernandez said. “The seller was able to evaluate multiple offers and chose the strongest buyer able to close at this record setting cap rate,” Fernandez continued. The buyer closed the all-cash transaction earlier this year.


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), Tampa, FL, Ft. Lauderdale, FL, Wilmington, DE and Boston, MA. Additional information about the firm and its listings may be found at www.calkain.com.

Distressed NNN Lease Market Continues Retreat

NNN Lease Market 

DC Commercial Real Estate has The Fourth-Lowest Level Overall of Distressed Assets 

While the volume of distressed commercial real estate properties is significant, so is the looming volume of stressed property. These properties have characteristics of concern in the short term — maturing loans, bankrupt tenants, under-performance, financially troubled owners or other significant obstacles that could potentially lead to distress in the future.

Washington and Baltimore

Of the 10 markets we track, the Washington area has the fourth-lowest level overall of distressed assets (excluding stressed) at $1.6 billion, while Baltimore has the lowest, at $430 million. Stressed assets are much higher in Washington, at $3.7 billion, third-highest among the 10 surveyed cities. Distressed real estate per capita is $289 per person for the Washington area, which is fourth-lowest among the 10 markets, while Baltimore has $157 per capita, which is the second-lowest of the 10 cities surveyed.

Opportunities to snap up distressed assets in the region have been limited. Washington’s assets have largely been held by strong, institutional ownership, and have benefited from the region’s steady economic performance and employment growth.

Mike Donnelly is a senior associate at Delta Associates. Staff at Delta Associates contributed to this article. For more information, please visit www.deltaassociates.com.

Retail Condo Building Sales in the Washington area Surged to $4.7 Billion

NNN Lease Market 

Mixed-use Urban Projects Have Drawn Retailers and Investors in DC

Apartment and condo building sales in the Washington area surged to $4.7 billion in 2011, a $1.1 billion increase from 2010 and a sign that investors’ efforts to buy into D.C.’s surging demand for rentals in particular is on the rise, according to newly released data from CBRE GroupInc. Multifamily sales for the year surged from $3.54 billion in 2010, according to CBRE. 

The brokerage’s District-based Multi-Housing Investment Properties team reported its own sales volume increased to $1.8 billion, up from $1.4 billion in 2010. Properties near Metro stations tended to command the strongest sale prices and rental rates increased more in the District than in its outlying suburbs, the brokerage said. www.bizjournals

Retail condominiums become popular with investors , expect to see a lot more retail condos coming to market within the next two to five years, because there are so many mixed-used developments under way nationally.

Deals are coming on the market in D.C. that will be over a $1,000 a square foot.” Retail condos will compete for single-tenant property deals. Instead of buying a Starbucks drive-through in a tertiary market, now you have a choice to buy a Starbucks retail condo, where there are a million people in a five-mile radius. www.icsc.org

 An increase in mixed use residential condominiums brought about by population movement toward the urban core  and  a pause in expansion by national retailers has contributed to the wide-ranging demand for NNN urban properties.  Coming on the heels of the recession and the ensuing across-the-board hike in cap rates, this move to dense, high traffic urban locations signals where investors want to be over the next decade. Recently identified as a top niche investment trend by the Urban Land Institute (ULI), mixed-use urban projects have drawn retailers and investors to this asset type even in the current market cycle.  Driven by a desire to spend less time in traffic, live in a smaller footprint and work and play within an urban atmosphere, aging boomers are leaving the edge and making their way back to the city. www.calkain.com

Multifamily Market is Surging

NNN Lease Market News

 Multifamily Properties is Surging




Demand for multi-family properties one of the best-performing sectors of the commercial real estate market in recent years,is surging, due to a lack of inventory in the pipeline in combination with the lowest home-ownership rates in more than a decade, Bloomberg News reported.

Investors’ desire for multi-family properties has allowed lenders to recover an average of 75 percent of the value of defaulted mortgages tied to multifamily housing the highest recovery rate among all commercial property types, Bloomberg said. Some buyers are even paying full price for distressed properties, forgoing the foreclosure procedure entirely, in an effort to snap up the assets before other buyers.

Last year, residential rental properties were one of the most sought-after property types, with sales totaling $54 billion by one measure, up more than 50% from the prior year, according to Real Capital Analytics. Average apartment prices per unit, about $102,000 nationally, are near peak levels.

www.Bloomberg .com

Net Leases Hit Record High 2011 Market

NNN Lease Market 


“Low interest rates, economic uncertainty and volatile equity markets will keep the single- tenant net-lease market one of the hottest CRE markets in 2012,” the report noted. “There is certainly a lot of money out there,” Randolph Mason, CCIM, SIOR and a partner with Commercial Realty Specialists, told Commercial Property Executive. “Depending on the tenant mix, (net leases) are absolutely a safe investment because of the lack of volatility.”

Cap rates for the sector continue to compress. According to data firm Real Capital Analytics Inc., average cap rates for single-tenant assets dropped from 7.7 percent at the beginning of 2011 to 7.5 by the third quarter. Comparatively, the average cap rate in 2010 was 7.9 percent. The Boulder Group, a research firm specializing in net-lease transactions, found a similar trend. A fourth-quarter report by the firm found that “the national single-tenant net-lease market transaction volume should remain active due to the stability and financing availability of this asset class.” Additionally, a majority of the firm’s clients are expecting 2012 transaction volume to increase between 5 and 14 percent from 2011 levels—with core assets from investment-grade tenants remaining in the highest demand. www.cpexecutive.com

IMPORTANT RECENT NET LEASES TRENDS

High credit tenants such as McDonalds, Walgreens, Wal-Mart, CVS, and most national banks have historically traded at lower cap rates and 2011 saw that trend continue. The security of their leases routinely demands lower cap rates. This is an important moderator on the net lease market. Though cap rates for lower credit tenants may oscillate highly depending on the economic climate, high credit tenants are usually assured a layer of protection. Though their cap rates will change to reflect the market, they will be insulated by their inherent security. Read full report here. 

www.calkain.com