NNN Lease Foreign Investors Pick Safe Havens of U.S Market

NNN Lease Market News 

NNN Lease Foreign Investors Pick Safe Havens of U.S Market

Calkain Companies, a national real estate investment brokerage firm, recently facilitated the sale of a net leased hospice located in Winter Haven, FL. This transaction marks the first closing in Calkain's international partnership with Platinum Investment Corporation, headquartered in Shanghai, China. This partnership was formed in the fall of 2012 and is committed to opening the global net leased investments to the Asian investor looking to the United States for passive cash flow and property ownership. The property, an 8,000+/- SF medical site, is well located on a signalized corner and had a 10 year lease with annual increases. The buyer assumed attractive financing terms offered by the seller's bank. Calkain's Asset Management Division was retained to manage the property for the foreign investor.

Associate Teal Henderson represented both the seller and the buyer in this transaction. "This closing is the beginning of a historical relationship and new venture for Calkain. We are looking forward to a very successful and long term partnership with Platinum Investment Corporation. As we educate investors in this demographic and their appetite grows, they are quickly becoming purveyors of the net lease product. We have been able to swiftly work through language and culture barriers, in addition to, a large time zone difference to close the first deal and we have already begun working on new transactions." Henderson commented.

Calkain Companies is a boutique commercial real estate brokerage firm which specializes in assisting buyers and sellers with single and multi-tenant retail, industrial, hotel and office net leased transactions. While licensed to conduct business in many states, Calkain has multiple office locations throughout the Mid-Atlantic, Southeast, Northeast and Midwest. Additional information about the firm and listings may be found at www.calkain.com.

Foreign Investors Often Make the Mistake of Looking at U.S. Real Estate as a Safe Haven

NNN Lease Market News

Africa Israel has struck agreements to sell a major piece of the former New York Times headquarters and the landmark Clock Tower building overlooking Madison Square Park in Manhattan, both at steep losses. It also has unloaded numerous parcels of land in Florida.

Africa Israel, headed by diamond-industry billionaire Lev Leviev, is the latest overseas company to run aground in the U.S. commercial market. In the late 1980s, Japanese investors purchased such iconic properties as Rockefeller Center and the Pebble Beach golf resort, only to suffer losses during the early 1990s recession.

Foreign investors often make the mistake of looking at U.S. real estate as a safe haven. "The U.S. market is one of the most transparent, the government is stable and foreigners often invest with a long-term horizon," said Mark Edelstein, head of the real-estate group at law firm Morrison & Foerster LLP. "The problem is they often buy near the top of the market and overpay."
In 1997, Mr. Leviev purchased a controlling interest in Africa Israel, a public property-investment company founded in 1934 by Jewish investors from South Africa. Under his leadership the company expanded into new markets like the Philippines and Russia, where Mr. Leviev developed a friendship with Vladimir Putin, now the country's prime minister. Projects developed by the company's Russian arm include AFIMall City, a giant retail complex in Moscow that opened in May after delays.

During the late stages of the U.S. real-estate boom, Africa Israel began making highly leveraged bets in big cities. Unlike many foreign investors, which tend to buy stabilized properties with solid cash flows, Africa Israel made highly speculative bets, buying up empty tracts of land and trying to convert office buildings to condos. It issued bonds in the Israeli market to finance much of the buying, racking up debt of 7.8 billion shekels by the end of 2009.

Craig Karmin at craig.karmin@wsj.com