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.

Nontraded NNN Lease Investments REIT Will do a Better Job

NNN Lease Market News

Industry executives say these new nontraded REITswill do a better job of giving investors a way to invest in real estate without the volatility of exchange-traded REITs, which have assets of roughly $500 billion. Like existing nontraded REITs, the new ones are offering attractive initial dividends, such as American Realty Capital's nearly 7% distribution and Cole Real Estate's 5.5% distribution.

But these new structures haven't completely silenced critics, who point out that some fees remain high and investors might still face redemption problems.

Jim Sullivan, a managing director at REIT research firm Green Street Advisors, says investors are still better off investing in a publicly traded REIT. "They are more liquid, they are more transparent and the market tells you every day what they're worth," he says.

Traded REITs, like nontraded ones, are required to pay at least 90% of their taxable income in the form of dividends. But unlike nontraded REITs, traded REITs' values are set throughout the trading day, giving investors instant transparency.

Nontraded REITs first became popular a decade ago. The pitch: Long-term investors would hold them for seven to 10 years, during which time they would collect attractive dividends. Then the REITs would sell their properties or go public, returning to investors their principal plus any gains. The trade-off was that redemptions would be limited during the lives of the REITs.

But fees were high—as much as 11% in initial sales charges. And only 19 of about 90 have returned investors' principal over the years. http://online.wsj.com

“A dividend that high indicates the market doesn’t believe that dividend is sustainable.

Yields in the 20s and 30s (and higher) often reflect a view by the market that this

dividend is likely to be cut. When investors get jittery about a REIT’s ability to cover

its dividend, they tend to sell shares, which causes the yields to jump. Some REITs

have suspended their dividends, while others have either trimmed them or opted to

pay a portion of them in stock.”  BradThomas.

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

NNN Lease Midwest Market Report

NNN Lease Market News

The Midwest Market encompasses a varied set of states that mainly include: Missouri, Kansas, Minnesota, Illinois, Kentucky, Ohio, Indiana, Iowa and Wisconsin.  The major cities and metro areas that highlight this market are St Louis, Kansas City, Indianapolis, Minneapolis/St Paul, Madison, Kansas City, Des Moines, Cincinnati and Columbus.  Chicago although considered a cornerstone of the region acts more like one of the major metropolitan areas behind New York, Los Angeles, Miami, San Francisco and DC. It is the more representative of the primary market in trends and pricing even though it is a hub for retail commercial real estate and reporting, its’ behavior is an exception to the majority of Midwest’s  NNN lease market. 

As a whole, the Midwest sector is underserved and largely untapped in the NNN leased niche. There are virtually no firms specifically working on the NNN assets for this market.  The majority of the investment grade listings are picked up by out of state brokers who may not be cognizant of the intricacies of the Midwest investor mindset and region particulars.  

Read the full report here. 

www.calkain.com