Net Leased Retail Deal Velocity Down

Posted October 22, 2012

In Columbus, Commercial, Los Angeles, Ohio, Retail, Santa Monica

What I have been experiencing over the last two or three quarters in regards to triple net or absolute net, single tenant retail seems to be reality according many in the industry, including Mark Heschmeyer of CoStar News.

Where are all of the net leased retail opportunities? There’s been strong activity over the last 18 months or so, but over the last several months, supply has really dried up.

“By the close of the third quarter, it was apparent that deal velocity had simply slowed across the board and in virtually every region of the United States,” Garrick Brown, Northern California Research Director for Cassidy Turley noted. “Though there is a natural lag time involved in gathering deals, our preliminary numbers and forecast final statistics for the third quarter of 2012 indicate slowing deal velocity (for net-lease properties) all around.”

I’ve said for months that it’s not that we have a market with slowing demand, but it’s just that there’s been a huge drop in available supply of what most investors want, and that’s triple net or absolute net, single tenant, investment grade credit, retail.

New Walgreen’s offerings are down by 50%, auto parts retailers by 12%, Drug stores by 22% and fast food by 12% so this is across most product segments. Plus, sellers are thinking twice about parting with investment grade tenants in properties who stuck it out through the very serious downturn.

I expect this to continue throughout 2013.

1031 Exchange, NNN Property, Triple Net Retail

Commercial realtor

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