Houston's Texas Profitable Market

NNN Lease Market News

Last year, Houston recorded 18,366 housing starts, the most of any U.S. market followed by Metrostudy but still way below its peak of 48,000 starts in 2006. Demand for new homes in the Houston area is strengthening, and more than 20,000 new-home starts are expected this year, according to Metrostudy.

Weyerhaeuser's strategy makes particular sense in a state like Texas, where it is relatively easy to get entitlements to build on land. It makes less sense to hold such large tracts, said Paul C. Quinn, an analyst with RBC Capital Markets.

Tricon joined with Johnson Development Corp., a Houston land developer, and an unnamed Canadian institution to buy Cross Creek. Glenn Watchorn, Tricon's chief operating officer, said the master-planned community was attractive partly because of the amenities and infrastructure that Weyerhaeuser has already added.

"If you believe the housing market has bottomed out, there's probably no better place than land," said Mr. Watchorn.

http://online.wsj.com

NNN Lease Economic Report

NNN Lease Market News

How does employment growth impact net lease activity? Or is that question even relevant to the space at all? If you were to substitute “office” for “net lease” in that sentence, the answers would be clear and immediate: “significantly” and “definitely yes”, for starters. Then would follow any number of calculations designed to show the relationship between this particular macroeconomic metric employment and office leasing activity.

There is no comparable body of research for the net lease space, however. Now two companies locally based Calkain Cos., and New York based Chandan Economics are partnering to produce research in the net lease space. The companies, headed by Jonathan Hipp and Sam Chandan, respectively, plan to launch a quarterly publication starting in the next 30 to 60 days. Initially, the publication, called Net Lease Economic Report, will be available for free to its clients. The goal will be to analyze the impact and relationship between tenant, developer and investor demand for net lease assets as well as establish relationships with broader economic trends.

“This subset of commercial real estate has been growing for the past two years and attracting new investor interest,” Chandan tells GlobeSt.com. “There is a need for much more rigor behind the research and understanding of the investment.”

The last two years have indeed attracted new levels and types of investors, Hipp tells GlobeSt.com, primarily a combination of institutional and private market investor. “The net lease investment profile can be very appealing especially when there is a lack of predictability and enhanced risk around commercial real estate in general.” Net lease’s stability is one reason why it has been attracting growing levels of investment, Hipp adds.

“That flight to safety that happened after 2008 and 2009 and has continued to make the net lease an asset class highly sought after and highly attractive to investors.”

About Calkain: Calkain Companies where triple netlease properties are the focus of our business. Working through the net lease investment process with our clients is the basis and foundation of our firm. We are America’s Net Lease Company!

www.calkain.com

McDonald’s is taking Net Lease Market Up-to-date

NNN Lease Market news

McDonald’s Corp. (MCD), the world’s largest restaurant chain, reported a 4.8 percent gain in first- quarter profit as new menu items such as Chicken McBites attracted U.S. consumers.

Net income advanced to $1.27 billion, or $1.23 a share, from $1.21 billion, or $1.15, a year earlier, the Oak Brook, Illinois-based company said today in a statement. Analysts projected$1.23, the average of 26 estimates compiled by Bloomberg.

“McDonald’s is taking market share just because their restaurants are more up-to-date, more modern and cleaner” than competitors, Peter Saleh, an analyst at Telsey Advisory Group in New York, said in an interview. McCafe beverages, which are a “growing category,” are also helping boost sales, he said.

The shares climbed 1.8 percent to $97 at 9:37 a.m. in New York, after rising as much as 2 percent for the biggest intraday gain since Nov. 30. McDonald’s had declined 5 percent this year before today.

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