Beloit wings fans, rejoice! Our sales associate Mandy Witt, representing the landlord, has brokered a 10-year lease with Buffalo Wild Wings in Beloit. Adam Dreier of Mid-America Real Estate represented the tenant.
Thoughts on commercial real estate by the area's leading industry professionals
Thursday, March 5, 2015
SOLD: 1824 & 1840 Lafayette St
Wednesday, February 25, 2015
There’s Gold in Them Thar Hills!
Well, it’s not a gold rush, but if you have net-leased or better yet a sale-leaseback property, hitch up your wagon. According to a recent article in National Real Estate Investor magazine, “Investment Irony”, there is stiff competition and a shortage of supply for both real estate types.
In Beth Mattson-Teig’s piece she quotes Mark West, senior managing director at a commercial real estate capital intermediary firm. “Across all product types in real estate, there is no shortage of capital...looking for good quality deals…And in the net lease, sale-leaseback space it is very attractive, and plenty of capital is looking for the long-term, predictable cash flow that is represented by sale-leasebacks.”
With the demand up and supply short, it would certainly appear that we are in a seller’s market for at least one segment of the commercial real estate arena. Real Capital Analytics tallies the total sale-leaseback transactions in 2014 at $9.4 billion.
The 2014 volume in sales can be attributed to what commercial brokers see “From the owner perspective, we have seen a high potential of sales, as owners have made it through the depression and have decided to capitalize on current market conditions.” They are monetizing those assets to fuel growth and expansion.
What I found very interesting in the article was the interest in shorter term lease deals. Brand new investment properties, whether they are net-leased opportunities like a Walgreens or a sale-leaseback, typically have a long-term lease. Long-term leases usually mean low cap rates, which translate to higher prices per square foot. Existing net-leased properties typically have leases with shorter terms that often times translate to higher cap rates, which deliver lower prices per square foot.
One investment company purchased a large warehouse in the greater Chicago area leased by Solo Cup. They had 10 years left on the lease which, in that market, allowed for the sale at a 7% cap rate. With a longer term lease, the article suggests, that rate would have been about 6%.
The buyer was thrilled that they were able to acquire this asset at $51 per square foot. That still seems pricey, but it is, after all, the Chicago market and not Rock County. However, it does appear that the treasure in the market is sale-leasebacks with shorter-term leases. If you own a property and would like to generate cash for growth, the time could not be better to go to market.
 |
| http://nos.twnsnd.co/image/110549060139 |
In Beth Mattson-Teig’s piece she quotes Mark West, senior managing director at a commercial real estate capital intermediary firm. “Across all product types in real estate, there is no shortage of capital...looking for good quality deals…And in the net lease, sale-leaseback space it is very attractive, and plenty of capital is looking for the long-term, predictable cash flow that is represented by sale-leasebacks.”
With the demand up and supply short, it would certainly appear that we are in a seller’s market for at least one segment of the commercial real estate arena. Real Capital Analytics tallies the total sale-leaseback transactions in 2014 at $9.4 billion.
The 2014 volume in sales can be attributed to what commercial brokers see “From the owner perspective, we have seen a high potential of sales, as owners have made it through the depression and have decided to capitalize on current market conditions.” They are monetizing those assets to fuel growth and expansion.
What I found very interesting in the article was the interest in shorter term lease deals. Brand new investment properties, whether they are net-leased opportunities like a Walgreens or a sale-leaseback, typically have a long-term lease. Long-term leases usually mean low cap rates, which translate to higher prices per square foot. Existing net-leased properties typically have leases with shorter terms that often times translate to higher cap rates, which deliver lower prices per square foot.
One investment company purchased a large warehouse in the greater Chicago area leased by Solo Cup. They had 10 years left on the lease which, in that market, allowed for the sale at a 7% cap rate. With a longer term lease, the article suggests, that rate would have been about 6%.
The buyer was thrilled that they were able to acquire this asset at $51 per square foot. That still seems pricey, but it is, after all, the Chicago market and not Rock County. However, it does appear that the treasure in the market is sale-leasebacks with shorter-term leases. If you own a property and would like to generate cash for growth, the time could not be better to go to market.
Wednesday, February 11, 2015
REBLOG: What is Fast Casual Food?
"Fast casual is THE THING, but it’s surprisingly hard to define what it is exactly. What makes fast casual food fast casual—and not simply fast food? And at what point do we draw the line between fast casual places and the likes of Applebee’s, which have table service, but also takeout? The answer might simply depend on whom you ask."
Read the rest here!
Read the rest here!
Subscribe to:
Posts (Atom)