TULSA, OK—With cap rates so low, it's a good time to be a seller—of net lease retail properties, that is. So says locally based Gill Warner, a senior director at Stan Johnson Co. Warner recently chatted with GlobeSt.com on the subject of net lease retail property performance, compared to others, and what you should know if investing in net lease. Read below for more.
GlobeSt.com: When advising clients, how do you know when is a good time to sell?
Gill Warner: A lot of times our clients know what they want to do whether it is a merchant developer needing capital for their next development or someone who wants to sell and buy another type of asset. Right now with cap rates so low it is a great time to be a seller.
GlobeSt.com: How does the performance of net lease retail properties compare to other net lease product types?
Warner: Most investors understand retail because we are all consumers and experience retail all the time. Industrial and office is a very different story, much steeper learning curve. Although in today's environment the retail playing field with the internet is changing so fast it can be hard at times to pick the right horse.
GlobeSt.com: If you are new to investing in net lease properties, what should you know (besides hire Gill Warner)?
Warner: Going with an experienced advisor is very important whether you are a buyer or a seller. Our company has been in this industry for over 25 years and we really know the industry. Understanding the risk associated with net lease properties is important. We try to help investors minimize their risk by looking at three things, the credit of the tenant, the lease terms and the real estate. All three legs are important to analyze when buying net lease properties.
GlobeSt.com: How is recent competition from institutional investors impacting the prices of net lease retail properties?
Warner: Cap rates continue to compress and with 1031 buyers back in a big way it has put pressure on institutional players to lower their cap rate expectations. Some institutions are on the sideline waiting to see what happens to cap rates or they are buying shorter lease term properties in order increase their cap rates. There are a lot of buyers out there. We are definitely in a sellers' market!
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
