Stan Johnson & Co. report: Single-tenant net-lease properties had second best year ever in 2016

by Dan Rafter

The commercial real estate market is a busy one today. And few property types are generating as much activity as are single-tenant net-lease properties.

Stan Johnson & Co. recently released its latest research report on this sector. And the biggest news? In the fourth quarter of 2016, the sale of single-tenant net-lease properties grew 29 percent to a volume of $15.8 billion, as compared to the prior quarter.

According to Stan Johnson & Co., this fourth-quarter push was the second best on record for this sector. For all of 2016, single-tenant net-lease sales accounted for $52.5 billion in volume, the second highest this number has ever been.

Who is buying these properties? Stan Johnson reported that for the fourth quarter, real estate developers and other single-purpose entities represented 26.9 percent of net-lease acquisitions. These buyers, who spent an average of $11.3 million on their acquisitions, preferred office properties first, then industrial and retail.

Institutions such as life insurance companies, investment managers and trust departments purchased 16.5 percent of the single-tenant net-lease properties sold during the fourth quarter. These institutions spent an average of $16.4 million on their net-lease purchases, and preferred to buy retail properties first, then office and industrial.

Private equity funds purchased 16.2 percent of the net-lease properties during the quarter, spending a much larger average of $28.2 million on each deal. These buyers preferred office, then industrial and retail.

Stan Johnson reported that single-tenant office sales, a category that includes medical office space, enjoyed the strongest fourth quarter. Sales jumped by almost $1.49 billion, or 31 percent.

One of the bigger office single-tenant net-lease deals of the quarter was the joint venture of KAMCO and 90 North buying a 330,000-square-foot office building in Cincinnati that was leased to General Electric for $107 million. Two of the bigger industrial net-lease deals took place in the Midwest, too. In DeKalb, Illinois, investment fund manager AIC Ventures acquired the 400,000-square-foot distribution center of Cast Aluminum Solutions in a sale-leaseback for a reported $69.4 million.

And in St. Cloud, Minnesota, Commonwealth REIT sold the manufacturing facilities of New Flyer, the largest bus maker in the United States to Broadstone, a REIT. The 338,000-square-foot facility sold for a reported $23.05 million.

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This entry was posted in Cincinnati commercial real estate, healthcare, Illinois, Illinois real estate, industrial real estate, Minneapolis commercial real estate, Minnesota real estate, national commercial real estate, office, Ohio commercial real estate and tagged , , , , , , , , , , . Bookmark the permalink.

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