Net Lease: Doing Ok, But Not Great

LOS ANGELES—People talk a lot in baseball terminology when predicting where we are in the cycle. For net lease, Andrew White, CCIM, western regional managing director of Gladstone Commercial Corp., says that we are in the 7^th or 8^th inning but the inning could last a few years. “We aren't headed for a crash,” he said.

Having said that, panelist White said at the recent RealShare Net Lease West conference that we won't see big price increases. “We might see a little bit of a dip,” he said. “We are doing ok, but not great. There is a lot of uncertainty in the world, but I don't think there will be any big spikes in the next few years.”

Brian Garrigan, principal of Patriot Equity Partners, said that we have hit a plateau at the peak, but he added that there are still opportunities out there. “We have a few more years of runway left.”

But the industry is much more disciplined than ever before, explained Ralph N. Cram, president and manager of Envoy Net Lease Partners. “From a supply side, what I focus on are deals that are 12- to 18-months away. Our competition is banks and what they don't like are construction loans and what they don't want on their books are apartments and hotel. They would like industrial and self-storage,” he said.

When moderator Steven Moreira, CCIM, CIPS, owner and president, Magic Cos., asked what happens is sellers start getting a little more worried, continuing with the baseball analogy, Garrigan said that he is preparing for the next game. “We are looking forward. I think there is an opportunity to make money in any type of market and in particular, a transitioning market, and we are preparing for that.”

Panelist Scott Scurich, SVP, Ten-X, said that his firm is uniquely positioned for a downturn, noting that when there is distress in the market, Tex-X is a pretty foor place to go to get rid of that distress. “For us, it might be a good thing.”

LOS ANGELES—People talk a lot in baseball terminology when predicting where we are in the cycle. For net lease, Andrew White, CCIM, western regional managing director of Gladstone Commercial Corp., says that we are in the 7^th or 8^th inning but the inning could last a few years. “We aren't headed for a crash,” he said.

Having said that, panelist White said at the recent RealShare Net Lease West conference that we won't see big price increases. “We might see a little bit of a dip,” he said. “We are doing ok, but not great. There is a lot of uncertainty in the world, but I don't think there will be any big spikes in the next few years.”

Brian Garrigan, principal of Patriot Equity Partners, said that we have hit a plateau at the peak, but he added that there are still opportunities out there. “We have a few more years of runway left.”

But the industry is much more disciplined than ever before, explained Ralph N. Cram, president and manager of Envoy Net Lease Partners. “From a supply side, what I focus on are deals that are 12- to 18-months away. Our competition is banks and what they don't like are construction loans and what they don't want on their books are apartments and hotel. They would like industrial and self-storage,” he said.

When moderator Steven Moreira, CCIM, CIPS, owner and president, Magic Cos., asked what happens is sellers start getting a little more worried, continuing with the baseball analogy, Garrigan said that he is preparing for the next game. “We are looking forward. I think there is an opportunity to make money in any type of market and in particular, a transitioning market, and we are preparing for that.”

Panelist Scott Scurich, SVP, Ten-X, said that his firm is uniquely positioned for a downturn, noting that when there is distress in the market, Tex-X is a pretty foor place to go to get rid of that distress. “For us, it might be a good thing.”