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 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 Rite Aid Sold

Triple Net Lease Market

Triple Net Lease Rite Aid Located in Gastonia, NC Sold!

Calkain Companies, a national real estate investment brokerage firm, successfully completed a triple net lease transaction in which a private client acquired a property leased to and operated as a Rite Aid (NYSE:RAD) pharmacy. The $2.3MM property was located in Gastonia, NC and the purchaser was a private, mid-Atlantic real estate investor. The 10,900 sf pharmacy building is leased to Rite Aid under a long-term, triple net lease, which provides passive income for the investor.

NOT SITE PHOTO 

Calkain’s Andrew Fallon, Associate, facilitated the transaction, providing exclusive representation to the Buyer. Pharmacies have long been a desired segment of the net lease market, but Rite Aid properties have been scrutinized given the company’s operating performance. Fallon worked closely with the buyer and indicated that, “the investor did extensive due diligence on this Rite Aid location, ensuring that the store was busy, had excellent sales, and was on a strong corner.” The property is located at a signalized corner across the street from a Walgreens, one of Rite Aid’s main competitors. Fallon continues, “Within the net lease market, Rite Aid’s are offering an inflated return to investors based on the perceived credit risk associated with the tenant.” Even with the perceived risk, the purchaser was able to secure competitive financing for the acquisition.

Rite Aid operates approximately 4,700 pharmacies in 31 states and the District of Columbia. Rite Aid is the largest drug¬store chain on the East Coast and the third largest drugstore chain in the county.

Calkain is a full service real estate investment brokerage firm with a national scope focusing on single and multi-tenant retail, industrial, hotel and office net-leased transactions as well as asset management, tax planning, and advisory services. Calkain has offices in Reston, VA (Washington, DC), Tampa, FL, Bethesda, MD, Wilmington, DE and Boston, MA. Additional information about the firm and its listings may be found at www.calkain.com.

Triple Net Lease Investment To The Market

Calkain Companies, a national triple net lease investment brokerage firm, has been named the exclusive advisor for the sale of the new D-1 Sports and Training facility to be built in Tampa, FL.  Located on the site of a former Circuit City at 6918 Gunn Highway, Tampa, FL, across from the Westfield Citrus Park Mall (+/- 1,000,000 Square Feet), this asset is another example of how strong real estate locations are being reused for new and vibrant tenants looking to take advantage of the prime locations available to them.

D1 Sports Training | Tampa, FL

David Sobelman, Executive Vice President, will personally lead the transaction process for this 33,400 Square Foot asset. Its high profile and strong intrinsic real estate value will attract investors seeking Florida-based assets occupied by sound tenancy for long periods of time.
D-1 Sports has chosen Tampa as its 13th US location and will include its high profile sports training facility, as well as a branch of Westchase Sports Medicine, which will provide rehabilitation services by two of the areas orthopedic surgeons.
Calkain estimates that with D-1 Sports, occupying the retrofitted facility beginning in August 2011 in which it signed a new ten year lease, will value the asset at over $6,000,000.
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), Florida, Maryland and Delaware.  Additional information about the firm and its listings may be found at

http://www.calkain.com/.