Net Lease Profile: Verizon
Verizon Wireless is one of the premier wireless communication brands across the United States, and their real estate offerings follow the same general trend, primarily sitting on premier real estate with incredible visibility along high foot-traffic retail corridors. With a preference for 4,000 square foot buildings, land requirements tend to vary between 0.80 to 1.25 acres. Verizon tends towards 10 year lease terms for free standing locations, however landlords and developers usually have to concede to one of a variety of early termination options varying from year five to seven of the lease, often allowing the landlord the right to recover an additional years rent upon the exercise of that option. Other terms within the lease almost exclusively require the landlord to maintain and repair the roof and structure, as well as parking areas. In contrast to the burdensome lease language regarding landlord obligations and early termination options, Verizon does provide credit, with the parent company rated A by Standard and Poor's with a stable outlook. Knowing the corporate parent is creditworthy provides a level of safety, however the actual tenant and guarantor on the lease varies, as Verizon utilizes a series of Limited Partnerships to secure real estate in different regions, along with other assets such as communication hardware, licenses, and cell towers.
Many retailers are seeing their business and real estate model drastically change with the advances in technology, however Verizon remains stable in their needs for class A retail locations to serve as showrooms for their various phone and tablet offerings. Leveraging their existing footprint, Verizon has begun marking their 'Fios' brand of fiber optic cable and high speed internet services in their showrooms. As their offerings continue to expand, this should serve as a further assurance that this retail tenant will continue to evolve and maximize the opportunities available within a brick and mortar showroom.
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