Why Net Lease Investors Love West Coast

LOS ANGELES—Stan Johnson Co. is actively expanding its net lease business on the West Coast, where investor appetite is strong, thanks to stable returns that have remained strong for the last six years. To lead the expansion, the firm has tapped Myles Helm to serve as regional managing director for the West region. To find out more about the expansion and why the West Coast remains such a great market for net lease investment, we sat down with Helm for an interview. Here, Helm gives us an in-depth look at the net lease niche on the West Coast, and explains why it is a good time for the company to expand its foothold.

GlobeSt.com: Tell me about your strategy for the West Coast and why is this an optimal time for the company to expand its West Coast presence?

Myles Helm: We have built a national real estate firm over past thirty years, but really, we're just getting started. So interestingly, this move is a part of our overall plan to build a top-tier, national real estate firm by increasing our ability to serve our clients and provide industry-leading coaching and management for our sales professionals. Timing is not the primary driver for us. Our strategy on the West Coast mirrors what we have built the firm on, finding the right professionals who fit our culture and are committed to going beyond for our clients.

GlobeSt.com: You have just been named to lead the West Coast markets. Will you also be recruiting other talent as part of the expansion?

Helm: We are always looking for great talent, in every market, and I am focused on adding some exceptional sales professionals who fit our culture here on the West Coast. Our target is professionals who are passionate about flawless execution and communication. We search for people that share our core values, are team players with a history of success that are highly motivated, goal focused and committed to client service. Our team is very excited to grow our ranks in West Coast markets and firmly believe it will benefit our clients and teams as we continue building a top tier national real estate firm.

GlobeSt.com: The West Coast net lease market has been very active for the last several years. Give me a snapshot of net lease on the West Coast now, where pricing and cap rates are and investor appetite for net lease properties.

Helm: The net lease market on the West Coast really is reflective of the national market, which has shown strong growth for over six years. Depending on the source you look at, cap rates in single tenant net lease overall have averaged between six and six and a half percent, which is what we're seeing as well, and investors continue to show confidence in the space, as they're investing at consistently high levels since 2013.

GlobeSt.com: What is driving net lease investment on the West Coast specifically?

Helm: I think what the market has shown us over the past several years is that real estate investors are interested in achieving stable returns with less intensive operational management and oversight. In my experience, investors on the West Coast are interested in the exactly that. Combine investor appetite with markets here that have shown the ability to support and grow real estate footprints across retail, office and industrial, and the West Coast can offer a quality product with long-term leases.

GlobeSt.com: Which West Coast markets are the most active right now for net lease investment?

Helm: The United States market is still the most desired country in the world for investment. Foreign capital comes looking for a safe-haven, and domestic capital – the big driver of net lease investment – is looking for low management, strong return vehicles. What's interesting about net lease investors is that they focus less on the market and more on the quality of the tenant and asset. So markets that offer a disproportionate share of long-term leases backed by investment grade tenants will always attract the most activity.

GlobeSt.com: What kinds of investors will you be focusing on and why? Is this a new investor pool for net lease, or is this an investor pool that you have always targeted?

Helm: We believe we bridge the gap between individual investors and institutional clients, and our teams have built strong relationships with clients all along the investor spectrum. With our focus on the net lease space, what we have seen over the years is that our clients come from a diversity of industries and backgrounds because net lease offers investment opportunities at all investment levels. Since I started with the firm in mid-October, we have served an individual investor in disposing of a $1MM retail asset in Ohio, an advisor in disposing of a $29MM industrial asset here in California, and a developer in selling a $34MM office asset in Illinois. What that tells me is that we have to be adaptable to serve our clients. And as the firm continues to add great professionals and build deep client relationships, we will add capabilities to go deeper where our clients want to go deeper. For instance, we recently launched our Corporate Finance Group to round out our ability deliver industry-leading insights and services to our clients who are showing interest in portfolio and sale-leaseback opportunities.

GlobeSt.com: What are your clients asking these days, and how is this expansion going to help service those client needs?

Helm: Our clients consistently ask for investment insights, real-time comparable data, access to a specific buyer pool and flawless transaction execution. Net lease investors who are seeking low management assets expect a frictionless transaction process with professionals who demonstrate a strong track record of execution and understand the nuances and needs of, for instance, a 1031 exchange or a zero cash flow opportunity. The company was built on a centralized platform and shared database that we continue to grow and invest in so that our clients benefit from the free flow of information across our company. We work as a truly collaborative team across the entire organization and are totally transparent – what this means for our clients is that as our team grows, our collaborative expertise and knowledge grows with us.

LOS ANGELES—Stan Johnson Co. is actively expanding its net lease business on the West Coast, where investor appetite is strong, thanks to stable returns that have remained strong for the last six years. To lead the expansion, the firm has tapped Myles Helm to serve as regional managing director for the West region. To find out more about the expansion and why the West Coast remains such a great market for net lease investment, we sat down with Helm for an interview. Here, Helm gives us an in-depth look at the net lease niche on the West Coast, and explains why it is a good time for the company to expand its foothold.

GlobeSt.com: Tell me about your strategy for the West Coast and why is this an optimal time for the company to expand its West Coast presence?

Myles Helm: We have built a national real estate firm over past thirty years, but really, we're just getting started. So interestingly, this move is a part of our overall plan to build a top-tier, national real estate firm by increasing our ability to serve our clients and provide industry-leading coaching and management for our sales professionals. Timing is not the primary driver for us. Our strategy on the West Coast mirrors what we have built the firm on, finding the right professionals who fit our culture and are committed to going beyond for our clients.

GlobeSt.com: You have just been named to lead the West Coast markets. Will you also be recruiting other talent as part of the expansion?

Helm: We are always looking for great talent, in every market, and I am focused on adding some exceptional sales professionals who fit our culture here on the West Coast. Our target is professionals who are passionate about flawless execution and communication. We search for people that share our core values, are team players with a history of success that are highly motivated, goal focused and committed to client service. Our team is very excited to grow our ranks in West Coast markets and firmly believe it will benefit our clients and teams as we continue building a top tier national real estate firm.

GlobeSt.com: The West Coast net lease market has been very active for the last several years. Give me a snapshot of net lease on the West Coast now, where pricing and cap rates are and investor appetite for net lease properties.

Helm: The net lease market on the West Coast really is reflective of the national market, which has shown strong growth for over six years. Depending on the source you look at, cap rates in single tenant net lease overall have averaged between six and six and a half percent, which is what we're seeing as well, and investors continue to show confidence in the space, as they're investing at consistently high levels since 2013.

GlobeSt.com: What is driving net lease investment on the West Coast specifically?

Helm: I think what the market has shown us over the past several years is that real estate investors are interested in achieving stable returns with less intensive operational management and oversight. In my experience, investors on the West Coast are interested in the exactly that. Combine investor appetite with markets here that have shown the ability to support and grow real estate footprints across retail, office and industrial, and the West Coast can offer a quality product with long-term leases.

GlobeSt.com: Which West Coast markets are the most active right now for net lease investment?

Helm: The United States market is still the most desired country in the world for investment. Foreign capital comes looking for a safe-haven, and domestic capital – the big driver of net lease investment – is looking for low management, strong return vehicles. What's interesting about net lease investors is that they focus less on the market and more on the quality of the tenant and asset. So markets that offer a disproportionate share of long-term leases backed by investment grade tenants will always attract the most activity.

GlobeSt.com: What kinds of investors will you be focusing on and why? Is this a new investor pool for net lease, or is this an investor pool that you have always targeted?

Helm: We believe we bridge the gap between individual investors and institutional clients, and our teams have built strong relationships with clients all along the investor spectrum. With our focus on the net lease space, what we have seen over the years is that our clients come from a diversity of industries and backgrounds because net lease offers investment opportunities at all investment levels. Since I started with the firm in mid-October, we have served an individual investor in disposing of a $1MM retail asset in Ohio, an advisor in disposing of a $29MM industrial asset here in California, and a developer in selling a $34MM office asset in Illinois. What that tells me is that we have to be adaptable to serve our clients. And as the firm continues to add great professionals and build deep client relationships, we will add capabilities to go deeper where our clients want to go deeper. For instance, we recently launched our Corporate Finance Group to round out our ability deliver industry-leading insights and services to our clients who are showing interest in portfolio and sale-leaseback opportunities.

GlobeSt.com: What are your clients asking these days, and how is this expansion going to help service those client needs?

Helm: Our clients consistently ask for investment insights, real-time comparable data, access to a specific buyer pool and flawless transaction execution. Net lease investors who are seeking low management assets expect a frictionless transaction process with professionals who demonstrate a strong track record of execution and understand the nuances and needs of, for instance, a 1031 exchange or a zero cash flow opportunity. The company was built on a centralized platform and shared database that we continue to grow and invest in so that our clients benefit from the free flow of information across our company. We work as a truly collaborative team across the entire organization and are totally transparent – what this means for our clients is that as our team grows, our collaborative expertise and knowledge grows with us.