Competition Rising Rapidly For This Asset Type

Jason Fox, president and head of global investments at W.P. Carey, tells GlobeSt.com investors ask themselves a series of questions before entering into this type of deal.

ATLANTA—Competition is rising for quality sale leaseback opportunities that ultimately morph into net lease deals, which is only one of the challenges in this sector. Indeed, both corporate property owners and SLB investors face obstacles to getting these deals done.

Jason Fox, president and head of global investments at W.P. Carey, tells GlobeSt.com investors ask themselves a series of questions before entering into a sale leaseback deal: Are you buying the real estate at the right price relative to its physical replacement cost and to other properties in the market?; Is the asset critical to the tenant’s business? If the tenant vacates the property, could it be easily adapted to the needs of new tenants?; Do you have a strong asset-management team that maintains an ongoing relationship with the tenant, stays up to date on the market and is aware of opportunities to enhance the value of or expand a property?; and In the case of vacancy, is the team positioned and equipped to release or sell the asset at a price that maximizes value for the portfolio?