NEW YORK CITY—It can seem impossible to separate the words'net lease' from 'cap rate compression.' But asJoshua Pardue, CCIM, of Stan JohnsonCompany suggests, that's most likely due to thecombination of the sector maturing and the economy heating up.

| met with the director of the company's New Yorkoffice leading up to the ICSC New York National DealMaking conference event happening here December 8 and 9,to talk about how the industry is changing, the company'sexpectations at the conference and what they're expecting for2015.

| What are your goals andexpectations for the ICSC New York National Deal Makingconference?


Joshua Pardue: The conferencewill give us an opportunity to sit face-to-face with clients who wetypically work with on the telephone. We typically canidentify a new project by meeting face-to-face with marketparticipants. The biggest goal of the event will bestrengthening the relationship with existing clients.

| What advice do you have for ownersand investors of net lease retail properties as we head into2015?


Pardue: Investors should becareful of their debt structures, strategies and forecasts as theyplace investments in an environment that will eventually witnessinterest rate increases.

| What about the net lease market keepsyou up at night?


Pardue: At some point it islikely we will see a bid-ask spread gap between buyers anddevelopers of NNN properties due to raising interest rates and costof capital. During this period developers will have to acceptthe new normal and re-evaluate the rent constant / cap on cost thatthey are negotiating into with their tenants. We are alreadyseeing developers enter into “skinny deals,” as the real estatedirectors for these national tenants negotiate rents, based ontheir understanding of today's strong NNN market.

| How has net lease retail investorinterest in secondary and tertiary markets changed during the pastfew years?


Pardue: We have seen investorsadjust their expectation in order to find and acquire product. We have seen investors look to secondary markets in order tofind yield as well as shift their tenant creditexpectations.

| What are your expectations for2015 net lease market?


Pardue: The market will continueto be strong and favor sellers but we will start to see somesoftening in certain NNN tenants like dollar stores. On theplus side, the economic growth should drive continued increases indevelopment which will create more product for the pent-up investordemand. We anticipate 2015 total net lease investment salesmarket to approach or potentially exceed $50 billion.


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Natalie Dolce

Natalie Dolce, editor-in-chief of and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses, 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 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 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,, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including and Museums New York magazine.