An analysis of West Virginia’s most recent demographic datareveals a State that is stable and predictable. The marketexhibits the following characteristics:

  • The highest rate of home ownership in the nation
  • #7 ranking for the percent of population living in the state ofbirth
  • Population growth of 0.6% between April 2000 and July 2009

The slow, steady growth in West Virginia should be viewed not asinhibiting investment but as a variable in one’s market assessmentthat can be easily quantified. As a net lease investor, thisshould provide confidence that with careful analysis, anyfluctuations in this growth factor should not be enough tojeopardize your investment’s success.

For certain net lease tenants that target lower incomehouseholds, such as Dollar General, this is especiallyauspicious. West Virginia’s high rate of home ownershipcreates a large base of Dollar General’s target demographic that islargely immobile. This strong demand will likely mean continuedgrowth of net leased tenants like Dollar General and similartenants in the West Virginia Market.

It is no secret there is a scarcity of high quality inventory inprimary markets. This is leading to a “downward compressionof cap rates across all sectors.” If this trend continues, thestrength of these markets will no longer justify the inflated pricetags and slim yields of the assets themselves. Opportunisticnet lease investors will need to begin looking beyond these supplyconstrained markets to have any chance of earning a superiorrisk-adjusted rate of return.

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Jonathan Hipp

Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.