Net lease Investments
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Calkain Companies, Inc. where triple net lease properties are the focus of our business. Working through the net lease investment process with our clients is the basis and foundation our firm.
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Net lease Investments
- 1. NET LEASED INVESTMENTS Jonathan Hipp, President & CEO David Sobelman, Executive Vice President Rick Fernandez, Assistant Vice President
- 7. Top 10 Annual Growth Areas By Percentage Change Source: Claritas, Inc. 17 18 Tampa, FL 8 8 13 6 San Diego, CA 17 8 43 41 Boise, ID 11 8 41 37 Naples, FL 5 7 1 1 Washington, DC – VA – MD – WV 6 6 19 19 Jacksonville, FL 7 5 4 5 Sacramento, CA 3 4 3 4 Phoenix, AZ 4 3 8 9 Las Vegas, NV 2 2 2 2 Riverside, CA 1 1 00-07 Rank 07-12 Rank CMSA 00-07 Rank 07-12 Rank Absolute Annual Growth Annual Growth Rate
- 8. Top 10 Annual Growth Areas By Absolute Change Source: Claritas, Inc. 15 17 Houston, TX 11 10 2 2 Las Vegas, NV 8 9 20 22 Dallas – Fort Worth, TX 4 8 22 21 Atlanta, GA 9 7 17 8 San Diego, CA 13 6 3 4 Sacramento, CA 4 5 4 3 Phoenix, AZ 3 4 42 36 Los Angeles, CA 4 3 1 1 Riverside, CA 2 2 6 6 Washington, DC – VA – MD – WV 1 1 00-07 Rank 07-12 Rank CMSA 00-07 Rank 07-12 Rank Absolute Annual Growth Annual Growth Rate
- 9. Average Household Income Growth Top 10 Markets Source: Claritas, Inc. IRR CMSA Average 1.94 1.81 IRR Top 10 Average 2.37 2.19 1,186.20 12 Richmond, VA 2.26 10 2.07 10 1,235.20 9 Philadelphia, PA-NJ-DE-MD 2.17 12 2.07 9 1,223.20 11 Sacramento, CA 2.34 8 2.11 8 1,137.40 14 Providence, RI – MA 2.32 9 2.12 7 789.4 54 Morgantown, WV 2.41 5 2.19 6 1,068.20 17 Birmingham, AL 2.42 4 2.21 5 1,421.80 2 Baltimore, MD 2.37 6 2.26 4 1,374.00 3 San Diego, CA 2.47 3 2.29 3 1,259.20 6 Virginia Beach, VA – NC 2.56 2 2.29 2 1,878.40 1 Washington, DC-VA-MD-WV 2.34 7 2.34 1 07-12 ($’s) 07-12 Rank CMSA 99-07 (%) 99-07 Rank 07-12 (%) 07-12 Rank Absolute Annual Growth Annual Growth Rate
- 16. Historical Rate Comparison Source: Cap Rates from Real Capital Analytics United States Federal Reserve
- 17. CMBS Rates Source: United States Federal Reserve
- 18. Investment Sales Still Up
- 19. Historical Net Lease Sales
- 21. Tenant Overview CVS/pharmacy BBB+ Starbucks A 7-Eleven S&P CREDIT COMPANY BBB+ Colonial Bank A McDonalds A+ PNC A+ Walgreens A+ Commerce Bank AA+ Citibank S&P CREDIT COMPANY NR Applebee’s NR Wawa B Rite Aid BB- Burger King BB+ Advance Auto BBB+ AutoZone BBB+ CVS
Editor's Notes
- Greeting and overview of what will occur during the talk.
- Discuss the topics that will be covered throughout the talk.
- -Overview of how a net lease is structured -Discuss the process of how a property becomes income producing -Difference between NN and NNN and why that may be the case.
- Can discuss the amalgamation of credit vs. real estate An overview of a true NNN lease Benefits of a strong (bond-like) lease What attributes are most attractive to an investor
- Need to change per the market Have a good understanding of demographic trends Statistics are vital!!! Possibly narrow things down to a county level.
- Explain that” this is the largest part of the discussion” Have strong understanding of: 10 year T, Fed Funds Rate, outlook of economy, Bernanke trends, that have been stated Capital Gains rate most likely to go up because of Democratic control of the House and Senate. That can occur in 2010 or earlier Currently the 15% is the lowest rate since the rate’s inception in the 1930’s
- Trends of ALL retail CAP rates over last 4 years 30 year mortgage Fed Funds Rate 10 year Treasury The point of this is to show that there used to be a large spread between the rates and there is currently a lot of compression, especially between the 10 year and CAP rates.
- CMBS = Commercial Mortgage Backed Securities = Conduit Loans There is about 100 basis points between 10 year and AAA credit loans There is about 200 basis points between 10 year and BBB credit loans
- Show the difference between investment grade and junk credit Reference the amalgamation of credit vs. real estate, etc. Emphasize that investment grade credit default rates are essentially the same throughout
- Need to alter to the audience If Developer – try to find out the tenants they work with If law firm/CPA – use as an example of different tenants and credits
- Overview of 1031 process What properties to investors exchange from? Estate Planning concept/benefits Introduction of the asset class is the primary topic
- Different per presenter