The Incredible Net Lease Dynamic
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IRVINE, CA-Edward Hanley, president of the Hanley Investment Group, says there’s no place he’d rather be right now than in the retail sector. In an exclusive interview, he tells GlobeSt.com that this is particularly true if you’re trafficking in the net lease sector, calling it the “Number-one investment product for private capital.”
Q: We’ve heard a lot about the re-emergence of the Town Center concept. What are you seeing?
A: We’re seeing a lot of new Town Center developments. Retail is morphing as consumers look for "more." Consumers want places where they can gather together and enjoy shopping in a fun environment. The Internet is putting pressure on retailers in terms of sales, so retailers, developers and property owners are responding by trying to offer consumers more of an experience that encompasses these elements.
Q: How does that dynamic redefine tenancy by going beyond needs-based retailers?
A: It’s an exciting time for our industry right now. We’re starting to absorb a lot of the excess space from tenants that have left the market, and the majority of that space is being filled by such tenants as fitness centers and specialty grocers. Also, retailers are redefining themselves to offer services to customers that they did not before, services that consumers have more recently defined as necessary.
Q: You mentioned the web. To what extent are they redefining themselves in reaction to Internet sales?
A: A great deal, actually. One good example is Radio Shack. They’ve addressed their issues with Internet sales to become more relevant to shoppers today.
Q: What are you seeing on the net lease side?
A: Extremely high demand. It’s probably the number-one sought-after investment product today for the private capital market. The supply is short and prices continue to rise.
Q: So the outlook is good for Hanley.
A: Yes, Hanley Investment Group is very happy. The retail industry is changing. There’s a lot of capital out there and not a lot of supply. And the market is active; owners and investors are not sitting on the sidelines anymore. They’re making decisions and that’s really exciting. Our inventory continues to increase, and the interest rate environment is low. In our estimation, it’s going to be an exciting 2014, ’15 and ’16.
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