NNN Lease Market

Multi-Family Properties is Surging

2012-03-07T10:22:00.001-08:00

NNN Lease Market News

Demand for multi-family properties one of the best-performing sectors of the commercial real estate market in recent years,is surging, due to a lack of inventory in the pipeline in combination with the lowest home-ownership rates in more than a decade, Bloomberg News reported.

Investors’ desire for multi-family properties has allowed lenders to recover an average of 75 percent of the value of defaulted mortgages tied to multifamily housing the highest recovery rate among all commercial property types, Bloomberg said. Some buyers are even paying full price for distressed properties, forgoing the foreclosure procedure entirely, in an effort to snap up the assets before other buyers.

Last year, residential rental properties were one of the most sought-after property types, with sales totaling $54 billion by one measure, up more than 50% from the prior year, according to Real Capital Analytics. Average apartment prices per unit, about $102,000 nationally, are near peak levels.

www.Bloomberg .com

Net Leases Hit Record High 2011 Market

2012-03-02T10:48:00.000-08:00

NNN Lease Market

“Low interest rates, economic uncertainty and volatile equity markets will keep the single- tenant net-lease market one of the hottest CRE markets in 2012,” the report noted. “There is certainly a lot of money out there,” Randolph Mason, CCIM, SIOR and a partner with Commercial Realty Specialists, told Commercial Property Executive. “Depending on the tenant mix, (net leases) are absolutely a safe investment because of the lack of volatility.”

Cap rates for the sector continue to compress. According to data firm Real Capital Analytics Inc., average cap rates for single-tenant assets dropped from 7.7 percent at the beginning of 2011 to 7.5 by the third quarter. Comparatively, the average cap rate in 2010 was 7.9 percent. The Boulder Group, a research firm specializing in net-lease transactions, found a similar trend. A fourth-quarter report by the firm found that “the national single-tenant net-lease market transaction volume should remain active due to the stability and financing availability of this asset class.” Additionally, a majority of the firm’s clients are expecting 2012 transaction volume to increase between 5 and 14 percent from 2011 levels—with core assets from investment-grade tenants remaining in the highest demand. www.cpexecutive.com

IMPORTANT RECENT NET LEASES TRENDS

High credit tenants such as McDonalds, Walgreens, Wal-Mart, CVS, and most national banks have historically traded at lower cap rates and 2011 saw that trend continue. The security of their leases routinely demands lower cap rates. This is an important moderator on the net lease market. Though cap rates for lower credit tenants may oscillate highly depending on the economic climate, high credit tenants are usually assured a layer of protection. Though their cap rates will change to reflect the market, they will be insulated by their inherent security. Read full report here.

www.calkain.com

US Commercial Property Market are Showing Signs of Improvement

2012-02-29T12:42:00.000-08:00

NNN Lease Market

The fundamentals of the US commercial property market are showing signs of improvement, with vacancy rates expected to drop over the coming year. According to the National Association of Realtor s’(NAR's) quarterly commercial real estate forecast, a strengthening across all sectors of the market is anticipated. Two-thirds of the professionals questioned stated they believe there will be an improvement during the first quarter of 2012, while rental increases are also on the cards. NAR chief economist Lawrence Yun commented: "Sustained job creation is benefiting commercial real estate sectors by increasing the demand for space. Vacancy rates are steadily falling."

A decline in the empty space available in the office, industrial, retail and multifamily housing sectors is predicted between the first three months of this year and the same period in 2013, with vacancy rates in the retail industry likely to fall the most - dropping from 11.9 per cent at present to 11 per cent in a year's time. Meanwhile, it is the multifamily housing market that has lowest vacancy rate, currently standing at 4.7 per cent. The NAR noted this makes it a "landlord's market, with demand justifying higher rents". Mr. Yun observed that apartments are likely to be a lucrative real estate investment going forward. "Leasing is on the rise and rents are showing signs of strengthening, especially in the apartment market where rents are rising the fastest," he asserted.

Saturated Real Estate Market Being Flooded

2012-02-28T13:17:00.000-08:00

NNN Lease Market

The 2001 recession was relatively mild in comparison to past recessions and depressions
that the United States economy experienced. The main factors that contributed to this
short downturn, were the tech bubble burst, the terrorist attacks on the World Trade Center
and a series of very much publicized accounting scandals, such as that of Enron. The real
estate market was only slightly affected by this recession. Cap rates increased slightly while
many investors shied away from the volatile stock markets and decided to put more money
into real estate and especially the attractively liquid REIT market which proved to be a
quick and easy way to hedge risk.
Despite the NBER officially declaring June 2009 as the end of the 2007 recession, the data
shows that GDP has not reached average quarterly growth level of 3.28%
until the first quarter of 2010 and even showed a declining trend starting after the first half of 2010.
In comparison, the year over year growth did not reach the median until mid-2010.

Researchers agree that the recent recession was caused by "the collapse of the housing market
and the resulting sub-prime mortgage crisis that led to bank failures in the US and Europe."
Businesses had a difficult time obtaining credit for real estate acquisitions, refinancing, or new
developments. Record high oil prices are also quoted as a reason for the worldwide economic
downturn. The impact of this international recession could be seen in the stock, as well as the
real estate markets.

As the liquidity crisis forced many businesses to sell part of their real estate
portfolios, the situation worsened due to the already saturated real estate market being flooded
with many more properties that had to be foreclosed or sold at sometimes half their prior values.

The commercial real estate market, as well as most other financial sectors, has been vastly

affected by the 2007 recession. Even though the recession was officially declared to be over, cap

rates and other economic measurements did not recover until many months after June 2009.

Demand for commercial real estate and GDP growth over the past decade have not been highly

correlated. Despite a relatively stable growth in the United States’ gross domestic product,

commercial real estate transaction volume skyrocketed until mid-2007 and then began to steeply

decline, indicating that investors put too much trust in the unsustainably increasing prices of real

estate.

A valuable lesson than can be learned from this, is for investors to have a realistic outlook

on the future of their investments. Real estate is not, as it is commonly thought of, a “safe bet”.

However, it is one of the most stable and profitable investments one can make relative to S&P

500 stocks, which lost over 56% of their value in the 2007 market crash and only recovered 63%

of that loss over a course of almost three years.

www.calkain.com

Residential Building Construction Up

2012-02-28T08:27:00.000-08:00

NYC residential building construction up

Residential building construction rose in 2011 by 33 percent across the five boroughs, according to a New York Building Congress analysis of U.S. Census data released today.

The city’s Department of Buildings issued permits for 8,936 new residential units in 997 buildings in 2011, up from 6,727 units in 1,074 buildings in 2010. This is still appreciably below the 2008 peak, when permits for 33,911 units in 2,434 buildings were issued, the report says.

http://therealdeal.com/

Cap Rates Fell by 25 Basis Points in 2011

2012-02-23T12:40:00.002-08:00

Overall, net lease cap rates fell by 25 basis points in 2011. The primary drivers of this trend are lack of product (especially high quality product) and an ease in lending conditions.

Construction of new net lease product continues to flow at a trickle while financing has become more available – with local and regional banks competing with insurance companies for credit tenant deals. Investors have shown the willingness and ability to invest but are hindered by lack of product to satiate their demand. This lack of supply and increase in demand has forced prices up and cap rates down – many would argue that 2012 promises to be a seller’s market in 2012. It is worth noting that these numbers illustrate the average trend in net lease cap rates and the net lease market itself is highly diverse depending upon tenant, lease terms and location.

Though these factors have always been significant, their effects have recently compounded. Investors have shown a preference for high quality tenants in prime – urban and suburban – locations and are willing to pay some of the highest prices in recent years to obtain them. Cap rates in prime markets can be up 125bps lower than the charted averages of many segments. However, investors are increasingly showing interest in properties containing lower credited tenants or located in secondary locations – exchanging risk for higher returns. Net lease investments continue to gain traction as an alternative investment instrument for cash flow and yield investors.

www.calkain.com

CPPIB Eyes Real Estate Deals

2012-02-17T06:59:00.000-08:00

TORONTO (Reuters) - Canada Pension Plan Investment Board, fresh from striking its biggest real estate deal ever, is weighing three or four other acquisitions as it looks to scoop up undervalued assets in a tumultuous global property market.

CPPIB struck three major real estate investments in the last month. It is part of a joint venture that agreed a $4.8 billion deal to buy a U.S. regional mall portfolio from Australia's Westfield Group (WDC.AX: Quote). CPPIB paid $1.8 billion for its stake, its biggest bet ever on real estate.

Also this week CPPIB said it would join forces with one of Britain's top commercial property companies, Land Securities Group (LAND.L: Quote), to develop land in Victoria Circle in London's West End.

Eadie wouldn't give specifics about any deals in the pipeline except to say he was keeping busy.

Washington DC Market Report

2012-01-25T07:52:00.000-08:00

WASHINGTON DC OFFICE & INDUSTRIAL REPORT

The single tenant Office/Industrial market is highly competitive today, however, this competitiveness varies due to the nature of the tenant and the relevant market. High credit tenants in primary – especially urban – markets are among the highest in demand. According to Costar the market for single tenant NNN investments is averaging 10,000 transactions a quarter. A majority of those were Retail spaces, Corporate and Regional HQ’s in Primary and Secondary Markets.

Of these primary markets, none is more interesting than Washington DC. Many Investors and Corporations have excess cash holdings and seek less volatile investments than the open stock and bond markets.

This trend has been realized through the increased activity of Institutional Investors, Private Equity Groups, and both publicly and privately traded REIT’s D.C. is particularly fascinating with the inclusion of Government and Government Contracting Tenants such as SAIC, Booz Allen, Lockheed Martin, Northrop Grumman, etc.

http://calkain.com/reports/research/calkain_research31.pdf

Boston Net Lease Market Heating Up

2012-01-19T11:15:00.000-08:00

Invesco Real Estates Institutional Client has Paid $75 Million for 179 Lincoln St. in Boston.

Building owners are seeing their offices fill up, leading to higher rents, which makes their properties more attractive to potential buyers. Many buildings have been the objects of bidding wars in recent months, with pension funds, insurance companies, and overseas investors competing to own a piece of the skyline.

“Boston holds a very desirable spot in global capital markets,’’ said Michael Smith, a managing director at Jones Lang LaSalle. “Many investors believe the city has weathered the recession better than other markets.’’

The volume of sales is still far from 2007, when 34 buildings changed hands for total sales of $4.9 billion. But the improvement is unmistakable after a period between 2008 and 2010 in which only 14 office buildings were sold in Boston, the kind of cold streak that causes nightmares for commercial brokers.

Just this past week, CBRE | New England closed on the sale of a five-story office building that drew more than 50 bidders, including several large financial institutions that typically focus on high-rises. The building, at 179 Lincoln St., was sold to Invesco Real Estate for $75 million.

“179 Lincoln St. is a great example of how people are viewing Boston today as one of the most attractive markets in the US,’’ said Chris Angelone, an executive vice president at CBRE | New England. “Five years ago, it might not have been an institutional buyer, but today it is.’’

http://articles.boston.com

Hotel Investment Returns Tend to be Higher This Year

2012-01-17T07:38:00.000-08:00

The Occupancy Rate was 71% for the Highest-Priced Segment of the Hotel Market from January through November 2011

Private-equity firms will help drive an increase in hotel transactions this year in smaller U.S. cities, where investment returns tend to be higher than in large markets, according to Jones Lang LaSalle Hotels.

“While public real estate investment trusts have been focused on major markets, private equity has been looking at secondary markets,” where hotel income is greater relative to property prices, said Arthur Adler, managing director and chief executive officer for the Americas at the firm, part of Jones Lang LaSalle Inc. (JLL) “The reluctance to invest in secondary markets is melting.”Minneapolis; St. Louis; Nashville, Tennessee; and Charlotte, North Carolina are among cities attractive to lodging investors because they lure travelers and have healthy business climates, Adler said in an interview.

http://www.bloomberg.com/news

A New Storm's for Office Market

2012-01-13T08:12:00.000-08:00

Mushrooming in Office Markets Throughout The Country

Penn Mutual Towers, an office complex across the street from Independence Hall in Philadelphia, has seen its vacancy rise and income fall after one big tenant left and another renewed its lease for 15% less than it had been paying. Its creditors are foreclosing on the property, according to data company Trepp LLC.

Similar problems are mushrooming in office markets throughout the country, foreshadowing a new wave of real-estate trouble. While the housing market was at the heart of the most recent real-estate crisis, office buildings—the center of past meltdowns—until now haven't been a major source of concern.

Rents in most markets are still well below what they were in 2007, with the drop in some areas as much as 26%, according to data firm Reis Inc. Because of the weak market, landlords with empty space or expiring leases also have to spend large amounts on incentives to attract tenants, like free rent and interior work.

To be sure, office vacancy rates have slowly improved in some markets as companies added jobs, and owners will benefit even more if the economy gains steam. Also, values of office property have increased in New York, Washington, Boston and other major cities, easing the stress on some properties.

For example, in New York, values of some office buildings are approaching boom-era highs, especially properties that are mostly occupied by credit-worthy tenants on long term leases. But six out of seven New York City's sub markets all have effective rents-which includes landlord incentives—down 15% or more since end-2007, according to Reis.

http://online.wsj.com

Abu Dhabi’s Government Agreed to Buy Assets Valued at 16.8 Billion

2011-12-28T13:14:00.000-08:00

Government Agreed to Buy Assets Valued at 16.8 Billion

The government will purchase 760 three-bedroom to five- bedroom homes in the Al Raha Beach development and retire 5 billion dirhams of debt related to infrastructure on Yas Island,Aldar said in a statement today. It will also buy 5.7 billion dirhams of assets in Abu Dhabi’s city center, known as the Central Market, and finance the completion of the district’s redevelopment.
Developers in the United Arab Emirates are struggling to pay down debts after the credit crisis caused property values to plummet and drove speculators out of the market. The statement was released after the Abu Dhabi market closed. Aldar gained 3.7 percent to 84 fils today, the biggest gain in about two months. The shares have fallen 31 percent in the past six months, while the Bloomberg EMEA Real Estate Indexhas lost 19 percent.
“This will have a positive sentiment in the market, leading investors to buy the stock aggressively,” said Musa Haddad, head trader at National Bank of Abu Dhabi PJSC’s asset management group said.

Intense Interest Among Developers in Urban Markets

2011-12-21T12:34:00.000-08:00

NNN Lease Market News

"Investors have shown a willingness to pay aggressive caps for urban properties"

"There are markets that we're operating in that are not seeing enough of a premium in terms of what people will pay for new development [or] to start speculative new construction," said Doug Linde, president of Boston Properties, the nation's largest office landlord. The company recently completed two apartment projects adjacent to their office buildings in Washington and Boston of 335 units and 86 units, respectively, above retail space. Monthly rents start at roughly $3,000.

The intense interest among developers in apartment buildings reflects rising rents and falling vacancies. In the third quarter, the national vacancy rate dropped to 5.6%, down from 7.1% a year earlier and the lowest rate since 2006, according to Reis Inc. Average monthly rental rates hit $1,004 nationwide, up 2.4% from a year earlier.

More Americans have been opting to rent in recent years as the allure of owning a home has diminished, due in part to tight lending restrictions, falling prices and rising foreclosures. These forces are driving up apartment building values—to levels unseen since 2007, in some cases.

The rush into apartment building development is raising the specter of a bubble, particularly in urban markets such as Washington and New York. While more than 173,000 units are expected to be started this year, 225,000 and 280,000 starts are expected nationwide in 2012 and 2013, respectively, according to Zelman & Associates. That still is less than 2005, when starts were at 352,000.

The recent spike in development is why some companies aren't joining the rush into multifamily projects. "I think there is a real possibility that anyone investing in multifamily right now is getting in toward the top of the market," said Doug Donatelli, CEO of First Potomac Realty Trust, which owns office, business parks and industrial properties.

Major real-estate companies generally stick to what they know best. Those who have strayed into unfamiliar businesses have had mixed results.

For example, analysts criticized Vornado Realty Trust in 1997 for leading a venture that purchased the nation's largest supplier of cold-storage space in a deal valued at close to $1 billion. Although Vornado eventually made a profit on the deal, if it would have purchased New York office buildings instead of cold storage "it would have done unbelievably better," said Michael Knott, an analyst at Green Street Advisors.

More recently, suburban shopping center landlord Kimco Realty Corp. is retreating from a $1.2 billion strategy to invest in mixed-use office and retail properties in urban markets. The company embarked on the strategy in 2007 to chase higher yields when prices for suburban shopping centers got too high, but realized that it didn't have the expertise in downtown development to make it a big success.

Apartments require a far different skill set than retail or offices. Turnover is high, so landlords constantly have to adjust prices to fill empty units. Tenants can easily be lured away by something newer, better located or offering more modern amenities. Landlords also have to worry about the economy worsening—plenty of apartment owners had to reduce rents after the financial crisis—and the for-sale market making a comeback. Investors have shown a willingness to pay aggressive caps for urban properties. An increase in mixed use residential condominiums brought about by population movement toward the urban core and a pause in expansion by national retailers has contributed to the wide-ranging demand for NNN urban properties. Coming on the heels of the recession and the ensuing across-the-board hike in cap rates, this move to dense, high traffic urban locations signals where investors want to be over the next decade.

Recently identified as a top niche investment trend by the Urban Land Institute (ULI), mixed-use urban projects have drawn retailers and investors to this asset type even in the current market cycle. Driven by a desire to spend less time in traffic, live in a smaller footprint and work and play within an urban atmosphere, aging boomers and Gen XYZers alike are leaving the edge and making their way back to the city. Developers have capitalized on this trend by coupling high-rise condominium living with easily accessible ground floor retail space. The convenience of these on-hand amenities makes for an attractive lifestyle for local residents and nearby office workers.

NNN Investment Market 8 Percent Returns

2011-12-21T10:11:00.000-08:00

NNN Lease Market News

REITs yield 8 percent returns

Real estate investment trusts that invest outside of the four major categories of office, retail, residential and industrial property have been especially successful, according to the New York Times.

REITs have outperformed other investment areas in general, but those pouring money into cell phone towers, cold storage warehouses, or transportation and energy infrastructure have thrived. The Dow Jones U.S. Specialty REIT index has returned 7.94 percent compared to the 3.32 percent returns posted by the overall REIT index.

Investors are buying commercial property as they search for higher yields than they may find on other assets, including some fixed-income securities. Buyers have flocked to high-quality real estate, such as office towers in major coastal cities, amid increasing tenant demand.

NNN Lease Midwest Market Report

2011-12-19T14:11:00.000-08:00

NNN Lease Market News

The Midwest Market encompasses a varied set of states that mainly include: Missouri, Kansas, Minnesota, Illinois, Kentucky, Ohio, Indiana, Iowa and Wisconsin. The major cities and metro areas that highlight this market are St Louis, Kansas City, Indianapolis, Minneapolis/St Paul, Madison, Kansas City, Des Moines, Cincinnati and Columbus. Chicago although considered a cornerstone of the region acts more like one of the major metropolitan areas behind New York, Los Angeles, Miami, San Francisco and DC. It is the more representative of the primary market in trends and pricing even though it is a hub for retail commercial real estate and reporting, its’ behavior is an exception to the majority of Midwest’s NNN lease market.

As a whole, the Midwest sector is underserved and largely untapped in the NNN leased niche. There are virtually no firms specifically working on the NNN assets for this market. The majority of the investment grade listings are picked up by out of state brokers who may not be cognizant of the intricacies of the Midwest investor mindset and region particulars.

Read the full report here.

www.calkain.com

What does it cost to do deals in South Korea Markets

2011-12-19T13:42:00.000-08:00

NNN Lease Market News

What does it cost to do deals in South Korea? For Lone Star Funds, a Dallas-based buyout firm, almost $3 billion.

While Lone Star still stands to double its money from the eight-year investment in Korea Exchange Bank, its experience will undermine the government’s ability to dispose of a $3.8 billion stake in Woori Finance Holdings Co. (053000), CLSA Asia-Pacific Markets said. It also furthers the perception that South Korea, where companies sell at a discount to the rest of Asia because of concern over corporate governance and North Korean aggression, is hostile to foreigners, Market Force Co.’s James Rooney said.

“Investors would look at this case as a kind of horror show, where every kind of risk that is hated by professional investors seemed to show up and create a massive distortion of intelligent markets,” said Rooney, the consulting firm’s Seoul- based chief executive officer and a member of the investment committee at Macquarie Korea Opportunities Management. “This case has made the prospects much, much worse for Woori.”

In November 2006, as regulators investigated whether Korea Exchange Bank’s financial strength was deliberately understated to let Lone Star buy the stake, a sale to Kookmin Bank (105560), South Korea’s largest bank, collapsed. London-based HSBC, Europe’s biggest bank by market value, dropped its $6.3 billion proposal after regulators held the deal in limbo for more than a year.

With politicians using Lone Star’s windfall to criticize the buyout fund’s investment strategy in South Korea and sway public opinion, foreign investors may now stay out of the bidding forWoori Finance and undermine the government’s effort to sell the nation’s largest financial company by assets, according to Shaun Cochran, head of Korea research at CLSA Asia- Pacific Markets in Seoul.

Since South Korea first announced its plan to dispose of Woori Finance in July 2010, the bank has lost about a third of its market value, or about $2 billion, as of last week.

http://www.bloomberg.com/news

Good News For Real Estate Market In 2012

2011-12-16T09:54:00.000-08:00

NNN Lease Market News

Good News For Real Estate Prices In 2012

A study released by Deloitte Real Estate Services says the U.S. commercial real estate market “appears to be on a gradual but uneven path to recovery with increased capital availability, transactions and improved fundamentals.” However, “a potential pause in recovery momentum” exists due to the European Debt Crisis, continued high unemployment rates in the U.S. and the high rate of maturing debt levels.

The Associated General Contractors of America released a study that says private construction spending increased for the first three quarters of 2011, but investments in the public sector continue to rapidly decline.

The National Association of Realtors reports pent up demand exists “from buyers who normally would have entered the market in recent years,” and that homeowner default rates now are lower than at any time in history.

For now, a 30-year fixed-rate mortgage remains at less than 4 percent, but a forecast by New York based investment banking firm Keefe, Bruyette and Woods, Inc. says the rate of 10-year treasury bonds should rise in 2012 because the Federal Reserve will not purchase enough mortgage backed securities “to keep mortgage rates from rising to 4.7 percent by the fourth quarter of 2012.”

What does all of this information mean? According to BusinessWeek, “…even the worst hit markets will begin to see improvement (in) 2012.”

Own a Piece of King Kong's Favorite Skyscraper Thought REIT

2011-12-02T10:07:00.000-08:00

NNN Lease Market News

The public may get an opportunity to own a piece of King Kong's favorite skyscraper.

The Malkin family of New York, which currently controls the 102-story landmark, filed papers with the Securities and Exchange Commission Tuesday saying that it has "embarked on a course of action" that could result in the skyscraper being included in a newly formed real- estate investment trust.

Lately the Manhattan office market has been under a cloud due to economic uncertainty and cutbacks in the financial services industry. But the Empire State Building has outperformed comparable properties, thanks in part to a recently completed $550 million upgrade.

The building was valued in the summer at $1.65 billion, when the Malkin family refinanced the property. The building's net annual income is $63 million, according to Commercial Mortgage Alert.

Developed in the early 1930s by group of investors led by tycoon John Raskob, the Empire State Building hit the market during the Depression and sat mostly empty for years. Gradually, though, the building filled up with hundreds of tenants and became a Hollywood darling featured in movies such as "King Kong" and "Sleepless in Seattle."

A real estate investment trust or REIT is a tax designation for a corporate entity investing in real estate. The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.

REITs can be publicly or privately held. Public REITs may be listed on public stock exchanges.

http://online.wsj.com/article

Toll Brothers is Acquiring Seattle Builder CamWest Development

2011-11-22T11:40:00.000-08:00

NNN Lease Market News

Toll Brothers to Buy Seattle Builder

It is Toll's first acquisition since its 2005 purchase of Landstar Homes in Florida and its first new state since the housing market sank.
While the Seattle market weakened during the downturn, prices have stabilized around 2004-2005 values and some neighborhoods are even seeing modest price increases, said David Bell, managing broker with RE/MAX Metro in downtown Seattle. The market didn't see a construction glut during the boom and has strong employers in the software and biotech industries, a combination that has buffered it from the foreclosure crisis that has depressed values by 30% or more nationwide.
Just one in every 856 of the Seattle area's households received a foreclosure filing in October, according to RealtyTrac. That is compared with one in every 563 housing units nationwide and one in every 143 in Stockton, Calif., one of the nation's biggest boom-to-bust markets.
Toll has been looking at the Seattle market for about a decade, but it has been tough to find suitable sites in the land-constrained market with tough environmental regulations for home construction, Toll Chief Executive Douglas C. Yearley Jr. said in an interview. http://online.wsj.com

You get value on many levels when you become a Toll Brothers homeowner.

NNN Market Loan Prices Rise in October

2011-11-22T10:10:00.000-08:00

NNN Lease Market News

Commercial Real Estate Loan Prices Rise in October

In October, DebtX priced 52,806 CRE loans with a $628.4 billion aggregate principal balance. These loans, which collateralize 647 US CMBS trusts, each received a DXMark(R), a price based on 10 years of data from billions of dollars in loan sales executed by DebtX, the largest marketplace for loan sales. Access to individual DXMark prices is available through the BLOOMBERG PROFESSIONAL(R) Service. Type DXMKfor more information.

DebtX's CMBS loan pricing analysis is part of DXMarket Datasm, a subscription service that provides loan buyers with insight about transactions at www.debtx.com . DXMarket Datasm is available to registered DebtX buyers and includes six components: Non-Performing Loan Sale Prices, Bank Watch, Secondary Loan Market Commentary, CMBS Loan Collateral Prices, Secondary Loan Market Liquidity and CRE Capital Markets Observations. http://www.marketwatch.com/

Over the last 12 months high quality assets have been in strong demand;drugs store such “Walgreens” being the perfect example. As a result of this strong demand, cap rates for high quality assets have been driven down to the low/mid 6% range. Investors are now looking for higher returns. Washington D.C., New York, Boston, Chicago, Dallas, L.A and San Francisco are all popular locations for acquiring net leased assets and urban infill locations with good demographics are highly sought after. www.calkain.com

New York Real Estate Market is Shrinking

2011-11-21T14:29:00.000-08:00

NNN Lease Market News

Manhattan Luxury-Home Supply Dwindles

Jason Haber, who runs a New York real estate brokerage firm, is struggling to find apartments to show a client who’s in the market for a Manhattan home priced around $8 million. “That’s not something you would do if the market was flush with high-end inventory,” said Haber, co-founder and chief executive officer of Rubicon. “That’s a sign of the times. This is a ready, willing and able buyer and we can’t find the product for him.
There were 832 homes on the market with asking prices of at least $5 million last month, compared with 862 in October 2010, 917 in 2009 and 909 in 2008, StreetEasy data show. In October 2007, near the real estate market’s peak, there were 588 listings.
Prices haven’t returned to peak levels. The third-quarter median price in the top 10 percent of the market was $4.17 million, down 16 percent from the high of $4.99 million in the first three months of 2008, according to Miller.

http://www.bloomberg.com/news

NNN Walgreen in Texas Close for $7.3 million

2011-11-18T12:19:00.000-08:00

NNN Lease Market News

Net leased Walgreens sells for $7.3 million in McKinney, Texas

McKINNEY, Texas - In a quick-moving, all-cash close, a private family trust from California has paid $7.3 million for a 14,820-square-foot store, net leased until 2033 to Walgreens.

Jim Casale, principal in the San Diego office of Lee & Associates, represented the buyers. Brad and Gavin Kam of Net Lease Realty Advisors in Dallas marketed the property for the sellers, JK 720 Custer LLC. The Walgreen build-to-suit delivered in 2008 at 8996 Stacy Rd. in the 2,500-acre Craig Ranch. The Deerfield, Ill.-based pharmacy chain's long-term lease includes options.

http://dallasrealestate.citybizlist.com

European Banks Will Sell More (NNN) Distressed Commercial Properties

2011-11-14T11:11:00.000-08:00

NNN Lease Market News

Europe Is Seen as Ripe Market for Distressed Property Loan Sales by Banks

European banks will be forced to sell more distressed commercial property loans in the coming year, as more borrowers default, said panelists at the Bloomberg Commercial Real Estate Summit.

The U.S. commercial real estate market slowed in the third quarter as the sputtering economy and a pullback in debt financing limited deals. A total of $49.8 billion of commercial property changed hands in the period, down from $58.5 billion in the previous three months, according to Real Capital Analytics Inc. in New York. The 15 percent decline is the second-biggest since the first quarter of 2009, the real estate research firm’s data show.

Dune Real Estate Partners LP expects investment opportunities in the U.S. next year, said CEO Daniel Neidich. Most investors are focusing on major coastal cities such as New York, Washington and San Francisco, according to Leslie Wohlman Himmel, managing partner at Himmel & Meringoff Properties, a New York investment firm that owns and operates more than 2 million square feet (186,000 square meters) of office and retail space.

http://www.bloomberg.com/news

Eight Triple Net (NNN) Leased Building Industrial Park Sold

2011-11-08T14:09:00.000-08:00

NNN Lease Market News

Triple Net Leased Trinity Ridge Business Center Sold

Dalfen America Corp. announced today the acquisition of Trinity Ridge Business Center.

Built between 1998 and 2007, this eight-building industrial park totals 234,000 square feet and is located in Cordova, Tennessee, an affluent suburb of Memphis.

In 2007, Trinity Ridge Business Center was acquired by DBSI Inc. for $22.9 million. The property was foreclosed on last year and the loan servicer, LNR Partners, LLC, sold the property to Dalfen America Corp for $7.2 million.

This property is the latest acquisition made by DAC's most recent value-added industrial fund, the firm's 17th real estate fund. Since its closing in February of this year, DAC's fund has acquired close to 1 million square feet of institutional quality multi-tenanted industrial properties and mortgage notes in select metropolitan markets across the United States.

"We continue to see areas of opportunity in the current real estate market and we believe this transaction offers a unique opportunity for Dalfen America Corp. to add value and generate superior returns for our investors," said Sean Dalfen, Dalfen America Corp.'s Executive Managing Director.

Dalfen is confident that the firm is uniquely positioned to capitalize on the steady flow of overleveraged assets being sold by lenders both on and off market because of its cash position, ability to make decisions quickly, and reputation for fair dealings.

www.prnewswire.com/news

Net Lease Grocery Stores are a Major Player in the NNN Market

2011-11-04T13:58:00.000-07:00

NNN Lease Market News

Location is Central to a Grocer's Success

Net lease grocery stores are a major player in the NNN market. Their focus on staple products and central locations are the definition of a stable asset. While other retailers with large foot prints couldn't weather the recession (Circuit City) net lease grocery stores made it through relatively unscathed.

Like all real estate, location is central to a grocer’s success. However, unlike other sectors such as office or traditional retail, there it not a strong temptation to overbuild. Grocery stores inhabit a very stable area of the consumer’s basket. A recession may force customers to cut back on casual dining and weekend shopping but milk and bread will still be bought.

For these reasons cap rates for grocery stores have recently compressed at a faster rate than the rest of the net lease market. Investors are demanding stable, recession proof assets and grocery stores fit this bill perfectly.

Read the full report here.