Net Lease Veteran Jonathan Hipp Joins Avison Young

Jonathan Hipp, Principal & Head of U.S. Net Lease Group, Avison Young. Image courtesy of Avison Young

Jonathan Hipp, founder and CEO of pioneering net lease real estate firm Calkain Cos., is joining Avison Young to launch a new U.S. net lease group, Commercial Property Executive has learned. Through the move, the global services firm is aiming to boost its net lease capabilities dramatically at a time when investors are pouring more capital into the niche asset category.

Washington, D.C.-based Calkain, established by Hipp in 2005, will shed its existing name and branding and its intellectual property will be absorbed by Toronto-based Avison Young, effective this week. Hipp will serve as principal and head of the newly formed U.S. Net Lease Group, reporting to John Kevill, principal and president of Avison Young’s U.S. capital markets team.

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In his new role, the net lease expert will be tasked with leading and expanding Avison Young’s previously scattered efforts in the space. Hipp will oversee a team initially consisting of seven or so professionals and will bring over his full book of clients, which range from institutional investors to family offices and high net-worth individuals.

Hipp cited the ability to plug into a company with 58 offices in the U.S. and a global reach as a key factor in the decision to join forces with Avison Young. “I think of this as a unicorn opportunity,” he told CPE.

Tapping a growing market

For Avison Young, the addition of Hipp gives the fast-growing firm deeper expertise in a real estate segment that is gaining popularity with investors in the hunt for attractive risk-adjusted returns. 

John Kevill, Principal & President, U.S. Capital Markets, Avison Young. Image courtesy of Avison Young

“Many of our competitive strengths play very well into the triple-net business,” Kevill said. “It squares really well with the growth of the capital markets business and, quite frankly, what’s going on in the overall markets. We’re seeing more and more private capital come into not only triple net and durable income properties but properties that had been traditionally thought of as more institutional.”

He added: “A byproduct of the triple-net business is incredible clarity into the private capital world. That’s going to be a really big competitive boost for our firm.”

Hipp started Calkain after serving as senior vice president of net lease investments at Grubb & Ellis Co. (acquired in 2012 by Newmark Knight Frank) and has since been involved in more than $12 billion in net lease transactions. The veteran executive will spend most of his time in Avison Young’s Washington, D.C., office, working shoulder-to-shoulder with longtime acquaintances Kevill as well as Keith Lipton, the firm’s COO of U.S. operations.

Investment in net lease assets surged 30.2 percent year-over-year to $20.9 billion in the third quarter of 2019, CBRE reported. Year-to-date volume through the quarter totaled $55.2 billion, representing an annual growth rate of 24 percent. Cross-border capital reached $6.8 billion as global investors sought out yield and portfolio diversification, the report found.

“The private capital but also the institutional capital (is targeting net lease properties),” noted Hipp. “Every month it seems like a new net lease REIT is coming to the market. People are chasing yields, it’s hard to find yield, and a lot of people have become very comfortable with real estate as an alternative fixed income.”

Avison Young gets bigger

The latest expansion comes amid a flurry of growth moves by Avison Young, which has 5,000 real estate professionals across 108 offices in 14 countries. Just last week, the company announced the acquisition of Washington, D.C.-based property management firm BMS Realty Services. In February of last year, Avison Young completed the purchase of top UK advisory firm GVA.

Avison Young also beefed up its human capital last month by hiring Chris Casey and Ken Sacco as principals in its Irvine, Calif., and Chicago offices, respectively. Last year, the company brought John Sikaitis on board from JLL to launch a new global innovation practice.