Triple Net lease Property Sells for over $4MM

Triple Net Lease Market

Triple Net lease Property Sells for over $4MM

Although triple net leased acquisitions are hard to find in in the greater Washington DC market, Betty Friant, Vice President at Calkain Companies, recently brokered the sale of a triple net leased day care facility in Gainesville, VA for just over $4 million at a very attractive 8.64% cap.

The tenant signed a new absolute triple net lease on the 10,530+/- square foot state-of-the-art facility located near the entrance of the private Lake Manassas Development with its signature Robert Trent Jones Golf Club. Betty Friant exclusively represented the developer/landlord in the transaction. The property was introduced to the market with corporate and personal guarantees and a 15 year lease term with annual escalations beginning in year three.

“Day Care facilities provide a very attractive investment,” said Friant. “With McDonald’s and other credit tenants on the market in the 4% to 5% cap rate range, the 8.5+% cap on a day care gives investors another option. The fundamentals of the underlying real estate are important in the acquisition of a day care as they are with any real estate purchase, so a great location and market rents are crucial,” she added. Calkain currently has other day care facilities on the market for sale in the 7.5% to 8.5% cap rate range.

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.

Triple Net Lease Asian Investors Pick Safe Havens of U.S

Triple Net Lease Market News 

Triple Net Lease Asian Investors Pick Safe Havens of U.S

Calkain Companies, a 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.

Triple Net Lease Podcast

Triple Net Lease News 



 Triple Net Lease Podcast 


You'll be happy to know iTunes has posted our new podcast under New & Noteworthy for Business > Investing, as seen in the attached screen cap. This episode features Jonathan Hipp and Sam Chandon reviewing 2012 and looking forward to 2013. 

Here is the iTunes link where you can listen:

https://itunes.apple.com/us/podcast/calkain-net-lease-podcast/id631770417

I encourage everyone to take advantage of this new media outreach model and participate in future episodes. If there is a topic you'd like to promote - could be anything including tenants, locations, market trends, advice etc - just let me know and I'll get you on the air.  

Thanks!

Triple Net Lease can Generate Better Long-term Returns

Triple Net Lease News 

As we reported at the beginning of the year, small-cap properties net leased to credit tenants are very attractive investments these days for buyers seeking reasonable risk-adjusted yields – and no active management responsibilities. Indeed, cap rates tied to net lease acquisitions have steadily narrowed for quite a few calendar quarters running to this point.

But a subset of triple-net investments – one that under some circumstances can generate better long-term returns than straight-forward fee-simple investments – has been attracting increased attention of late. It involves the trading of the dirt beneath structures that are owned and operated (via long-term leaseholds) by the merchants with their names on the doors.

Market values of land alone logically come in somewhat below what ownership of both land and improvements would fetch. And buyers just as logically expect a return premium for full ownership relative to ground leases.

Hence the historic differential in cap rates between ground leases and outright trades of land and net leased structures is typically in the range of 50 to 100 basis points depending on location, tenant credit, lease term and structure and related factors, notes active net lease investment broker Andrew Fallon, assistant vice president with specialty advisor Calkain Cos. for more click here  

Triple Net Lease Dollar General Sold

Triple Net Lease Market News

Dollar General Net Lease Sells for $1.23MM in Petersburg, VA

Calkain Companies recently sold a Dollar General (NYSE: DG) triple net lease property located in Petersburg, VA. The transaction closed within the past 30 days and illustrated the compressing cap rates within the net lease segment of the market. The buyer was a privately held, fully integrated real estate investment company. The seller was a regional real estate developer. As a preferred developer for Dollar General, the same seller has engaged Calkain to sell another store in Halifax, VA. These  Triple net lease Dollar General properties have been developed as part of Dollar General’s build-to-suit program. The stores have brand new 15-year triple net leases, which provide passive income for the new owner.

Calkain’s Andrew Fallon, Assistant Vice President, facilitated the transaction by providing exclusive representation to the seller. More sales of Dollar General stores have been transacting since S&P raised the company’s credit rating to investment grade BBB- in April 2012. The Petersburg store was highly sought after given its proximity and access to the I-95 corridor, the surrounding demographics, and the favorable lease structure. Fallon commented, “As Dollar General continues to roll out new stores in new markets, the investor demand continues to increase for superior market locations.” The combination of tenant credit and triple net lease terms provide a passive, bond-like fixed income investment, “The leases with Dollar General’s guaranty provide a strong income stream for the buyer, who will have limited to no management responsibilities.” The buyer financed the purchase using a regional bank.

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, nationally, Calkain has multiple office locations throughout the Mid-Atlantic, Southeast, Northeast and a new office opening in the Midwest. Additional information about the firm and listings may be found at www.calkain.com.

'Triple Net Lease'

A lease agreement that designates the lessee (the tenant) as being solely responsible for all of the costs relating to the asset being leased in addition to the rent fee applied under the lease. The structure of this type of lease requires the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance. The lessee has to pay the net amount of  three types of costs, which how this term got its name.

Read more: http://www.investopedia.com/terms/n/netnetnet.asp#ixzz28vvZPRAp

Triple Net Lease CVS Pharmacy Sold

Triple Net Lease Properties

Calkain Net Lease Investment Advisors recently completed the sale of a triple net lease investment property in Washington, DC. The purchaser, a private 1031 investor, seeking a stable, credit rated, income-producing asset. The sale, closing at over $1,154 per square foot, broke the record previously set by Calkain for a triple net lease investment sale.

Rick Fernandez, Managing Director of Calkain triple net lease  Investment Advisors, represented the seller in the transaction and Calkain Managing Director, Jerry Burg, represented the buyer on the purchase of the CVS on Columbia Road in Adams Morgan. “The Adams Morgan CVS is well situated in a grocery anchored, dense, high traffic, urban location within a diverse residential and retail community,” explained Fernandez. “The investor understood that this CVS not only provided a stable income stream backed by a strong credit rated corporate tenant, but also a highly adaptable asset with rock solid generational value,” continued Burg.

The seller reviewed multiple offers from across the country before closing with a private investor who was working with Burg to identify $35MM in triple net lease investment properties for a 1031 exchange. The transactions closed in the past thirty days.

Calkain Companies is a triple net lease investment 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, nationally, Calkain has multiple office locations throughout the Mid-Atlantic, Southeast and Northeast United States. Additional information about the firm and listings may be found at www.calkain.com.

Triple Net Lease Cap Rates Report

Triple Net Lease Market News

The report also notes there is stronger investor demand for bank branches, pharmacies, and the best-performing fast food chains. Bank branches registered average cap rates of 6.1% in Q1, for example--100 basis points lower than the 7.1% average cap rate for pharmacies.

Investors, however, can be counted on to show a high degree of sophistication in their acquisitions not only across classes of tenants but specific tenants, as well. Sam Chandan, president and chief economist of Chandan Economics, tells GlobeSt.com. “Some pharmacy and bank branches are trading at sharply lower cap rates than their peers, even after controlling for variation in property quality and time to lease maturity.” For these most coveted assets, he says, debt yields are lower, as well, meaning that lenders perceive many of the same differences as relates to credit risk.

The most aggressive cap rates Jonathan Hipp, CEO ofCalkain, says he has seen has been in the mid 4s for “McDonald’s-type credit.”  Expect compression to continue, he tells GlobeSt.com. “Given where Treasuries are headed, people are looking for yield. Also, there is so much buyer interest in this product now we have gotten to the point where we almost don’t need new buyers. What we would like to have is more products.”

Not that the demand-supply imbalance will give investors pause, Hipp adds. “With everything going on, from the uncertain employment picture to the European debt crisis, at end of day people are still cautious on the economy. With the right combination of credit, location and length of lease it is a great time to be a seller in the net lease market.”

 Click here to view Triple Net Lease Cap Rates Report