Right now, BV Net Lease Capital has a property under contract in Chicago, along with three other deals that managing member David Piasecki expects the firm will be in the final two or three for the next round of offers. It’s a good start for a year in which the Blue Vista Capital Management affiliate hopes to close $150 million in net lease transactions. If nothing else, these four transactions reflect a marked improvement from the challenges faced in 2024.
"Most of us went into the beginning of this year with more optimism than last quarter," Piasecki notes, observing an uptick in activity and viable product over the past few months. This positive trend has left Piasecki "moderately encouraged" about the prospects for 2025.
Piasecki is speaking at GlobeSt.com’s Net Lease Spring conference, being held on April 1 in New York City.
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He anticipates that one of the conference’s talking points will be the signs of increased momentum that the market is showing. "In M&A, there is a recognition of reality as the buyer-seller gap is narrowing. Sellers are cutting deals and have reached price discovery.” This shift in market dynamics is creating more opportunities for transactions to move forward.
Piasecki's firm completed four acquisitions last year, investing money from two different funds. He describes the overall deal flow in the net lease sector as challenging. "It is hard to do deals when you don't see many opportunities," Piasecki admits.
While optimistic, Piasecki acknowledges that some of the challenges he saw in 2024 will likely persist this year. "Last year we had three deals that we had been winning – sale leaseback transactions – and then the deals blew up because of valuations or the cost of financing changed the metric of the deal.”
It’s no fund to win a contest and then find out the contest got called off, he added.
Looking ahead, Piasecki anticipates that M&A deals will gain momentum this year, and as interest rates stabilize, there will be even more activity, particularly in the manufacturing sector. "I don't think we are looking at a rate environment occurring far south of where we are right now. Not for the next two years at least," he predicted. “People recognize that and say now is the time to do something.”
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
