CHICAGO—Stan Johnson Company, a national realestate brokerage firm that specializes in net-lease investmentproperties, recently hired Mark Hellwig as a director in its Chicagooffice. Hellwig has an extensive track record in thesale of office and industrial investment properties, and one of hisresponsibilities at Stan Johnson will be handling the sale ofGSA-leased assets. As reported extensively inGlobeSt.com, the single-tenant net leased market in general has attracted hordesof investors, and we spoke with Hellwig specificallyon the state of the GSA-leased market and how the recent economicnews will influence it.

How would you describe the state of the sale ofsingle-tenant government leased buildings?

There is very strong demand for larger, long-term GSA-leasedassets, and the market is providing a low supply of suchproperties. These fundamentals have caused a steady decline in caprates over time. Demand for long-term leased, stable assets amonginstitutional investors and well capitalized private capital fundsare probably as strong as it has ever been. Governmentbuild-to-suit projects have slowed, causing an overall drop in thesupply of newer properties available for purchase. As the inventoryof GSA-leased product grows older, average lease term isdecreasing, resulting fewer of the most desirable long-term leasesavailable. As capital continues to seek out acquisitions, it isconsidering shorter lease terms, smaller assets and locationsoutside of the primary and secondary markets.