NNN Lease Market One of the Hottest Deals

NNN Lease Market News

The market for urban retail properties has witnessed a sharp resurgence in the past couple months. In-fact, we are seeing cap rates and prices that are reminiscent of the markets heyday back in 2005-2007. There is such a strong demand for these properties that they are routinely receiving multiple offers. This trend is being fueled by a number of factors such as inherently strong real estate quality, low interest rates, and a surplus of investors willing to deploy capital.

It is no secret that a great deal of the net lease market’s recent success is due to the security it offers investors. Net lease properties offer investors reliable income streams with little to no active management. These qualities are only enhanced in the context of urban condos. Unlike properties located in tertiary markets, urban retail can depend on higher foot traffic and a greater intrinsic value. This serves to add an extra layer of security to the investment – should a tenant leave it will not be hard to replace them.

Investors know this and are actively seeking these properties. Low interest rates coupled with a surplus of capital (that had previously been sitting on the sidelines) have led to a perfect storm of rising prices and falling cap rates. Likewise, many sellers are reluctant to sell because they would face the same problem in redeploying their capital. As demand continues to gain momentum it is likely investors will dig even deeper for tenant and location, resulting in downward pressure on cap rates.

http://www.globest.com/blogs

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.

BX.N

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

NNN Net Lease Investment Deals are Picking up in Sarasota County

NNN Lease Market News

For the past few months, it has been hard to come up with enough $1 million plus net lease investment deals in Sarasota County to fill a top 10 list. But that wasn’t a problem in January.
Kohl’s Department Stores led all net lease commercial deals in the county with its $3.8 million purchase of a 59,582-square-foot retail building at the intersection on Tamiami Trail and Central Sarasota Parkway.
Next on the list was Plantation Grove Ltd., a Sarasota company managed by Neil Malamud, which bought medical a 13,738-square-foot medical office building at 1427 S. Tamiami Trail in Sarasota for $3.75 million.
The third entry on the list, however, does not count as a sale. It was a transfer of 22,572-square-feet of office space to a bank-owned limited liability company.
Here is a complete list of the top 10 net lease investment deals in Sarasota in January:

By Michael Braga (email)