TAMPA, FL-With 2013 a seemingly distant past, it's clear that most of us are now focused on the year ahead. It was clear to us that single tenant, net leased properties have become their own industry and are no longer a subset of the overall real estate market. Even ICSC has begun recognizing the net lease industry by hosting the inaugural ICSC N3 Net Lease Conference in Dallas in March 2014.

It is apparent that everyone, even those who once thought of net lease investments as an afterthought of their investment portfolio, are now laser focused on how this asset class of properties can drive profits during bull markets while offering stability through even the most challenging of bear markets.

Consolidation is a word that I heard a lot in 2013, a trend very likely to continue throughout 2014. Even my firm has been approached by other professionals in the net lease industry to discuss a larger platform in order for them to be more competitive in the marketplace; a concept that we're totally open to discussing.

But even beyond the brokerage realm, real estate investment trusts and even public and private funds have joined forces in this market to increase their market cap, lowering their overall cost of debt while becoming more attractive to investors throughout the country.

The most glaring example of this consolidation would have to be American Realty Capital purchasing CapLease and Cole in the latter months of 2013, with the Cole acquisition slated to close in early 2014. Once regarded as some of the most prolific net lease REITs in their own rights, CapLease and Cole have been gobbled up in order to provide ARCs investors, new and old, more clout within the industry. The $11.2-billion Cole transaction will ultimately create the largest net lease REIT with an enterprise value of $21.5 billion.

In-fact, publicly traded net lease companies now combine for $40 billion in market capitalization - a larger presence than the industrial real estate REIT sector and on par with lodging and self-storage. Time will tell if these acquisitions are good for the market or the tipping point towards its ultimate downfall for investors conceding to institutions dominating large portions of the single tenant assets. Does eliminating competition provide more stability for the overall economics of an industry or the opposite?

Additionally, we're seeing a trend where less experienced people are entering the market in order to capitalize on the deal flow occurring within the industry. Companies, brokerage and institutional investors alike, are taking chances on new faces within the industry in order to either compliment their in-place activity or to give clients the impression that they are working with a "player" within the business. I seem to remember this same trend in 2005-2006 where new people were entering the market, buoyed by some sponsor for a short period in order to make a living and then disappearing as soon as market dynamics changed. This ultimately led to one of two scenarios; one of which was highlighted in an article I authored in November 2009 on Globest.com entitled, “Broker Attrition, Who is Left” or the other scenario where a broker was on to their next adventure following momentum into REO properties or vulture funds. As the economy recovered, we began to hear less of these groups and individual practitioners driving the business model and brokers that followed that model away from the industry.

However, a very strong case can be made that there is a higher level of sophistication by true professionals within today's net lease investment industry. While there are still some examples of brokers clearly fitting an age old connotation, the majority of today's net lease service providers have a fundamental understanding of how to transact in today's market, albeit with different results depending on their experience. It seems that with the popularity of the investment class came more educational opportunities for others and allowed the industry to mature to a place where there can be an understanding of what influences any given transaction.

This phenomenon allows those in and out of the industry to more quickly delineate who is the best in the industry. We all want the best to work for us, to work with us and work around us. But in years past, it was clear that an internet connection allowed you a market presence, even though there was little to no experience involved. Today, performance and reputation trump all else. With the professionalization of the industry on the rise, sole-proprietorships and smaller net lease firms will begin to be scaled out of the business and may be forced to attach to a more regional or national firm. This doesn't mean that those working from their home office will be banished from the industry, but as the net lease segment continues to progress, those involved in the industry will want to be offered the services that come from mid-sized to larger net lease firms. The research, marketing, outreach, administration, asset-management, brokerage, advisory services, debt placement and private equity components of any one transaction will be compulsory services in order to be considered one of today's net lease superstar firms.

One should be warned that by merely having sheer numbers of people in a given firm will not ultimately dictate the performance of the individual broker. But those that are involved or want to be involved in the industry will look to those with a sole focus of net lease properties coupled with the high level of accomplishment with the vast resources provided by the respective firm. In essence, the firms with the best reputations and platforms to perform for their clients will be more attractive to those looking to assimilate into the net lease world.

David Sobelman is EVP and managing partner of Calkain Cos. He can be reached at [email protected]. The views expressed in this column are the author's own.