Finance

From the point of view of private-equity investment, times aren’t that bad in the net lease business. That’s the thinking of Jeffrey Hoppen, chief investment officer of Princeton, N.J.-based Sovereign Investment Co., a private principal equity investment firm specializing in net lease portfolio transactions. Hoppen further posits an increase of community and regional banks looking to sale-leaseback transactions as a route to diversification of funding sources. Sale-leaseback transactions, he says, are no longer viewed as a move by struggling companies in need of cash. Instead, they have become financial management tools used by stable companies to rearrange their capital structure,…

When CPN NetLease last spoke with George Pandaleon, president of Inland Institutional Capital Partners, last fall, the subprime meltdown was still fresh news and still a harbinger of uncertainty more than anything else. Since then, the reverberations of the crisis have become all too well known, and a new – and much tougher – borrowing and lending paradigm has established itself. But has the crisis been particularly calamitous on the net lease industry? Pandaleon says no. Certainly lending conditions haven’t adversely affected the $1.1 billion joint venture that Inland American and Lexington Realty Trust formed in 2007, Lease Strategic Assets…

Can a specialist in the net lease business survive and even prosper in an ill-starred real estate market? Jonathan Hipp, president & CEO of Reston, Va.-based Calkain Cos. Inc., has no doubt of it. In fact, he says, he’s looking forward to the rest of the year, as opportunities occurring in a down market tend to reveal themselves. Also, Calkain recently buttressed its platform by making a strategic alliance with McLean, Va.-based Fraser Forbes Co. L.L.C. to improve the services they each offer. Fraser Forbes focuses entirely on raw land deals, while Calkain focuses on income-producing properties stabilized by a…

The first quarter 2008 Net Lease Market Report by Northbrook, Ill.-based Boulder Net Lease Funds L.L.C. characterizes the current state of the market in the following unusual terms: “The market,” it asserts in the first paragraph, “is difficult to make sense of at the moment.” On one hand, the economy is either in a recession or about to go there; oil prices are setting record highs seemingly every week; demand for real estate is flat or down; and debt financing is hard to get. On the other hand, “asking cap rates appear to be shifting towards a level where deals…

Since the beginning of the subprime meltdown, various proposals have been made at various levels to ameliorate the crisis, and by extension, the sorry state of the residential market. Interestingly, one idea involves borrowing a page from the tenant-in-common market, and the idea is so new that it doesn’t really have an agreed upon name. Instead of foreclosing on a residential property – anything from single-family to owner-occupied multifamily properties – a lender becomes fractional owners in the property with a borrower who can afford a reduced mortgage payment. The lender receives a piece of equity and the borrower still…

The impact of the credit crunch on every corner of the commercial real estate market is now well established, but the question remains: how much longer will financial markets be in a funk? And will a generalized slowdown in the economy slow the business down even more? Robert Miller, president and founder of Chicago-based Millco Investments, cautions that the net lease side of the business, while not in a state of collapse, is going to have to get used to the slowdown at least until after the presidential elections, and probably longer. Both buyers and sellers will have no reason…

Among many other kinds of real estate deals, Jones Lang LaSalle Inc.’s Capital Markets Group is an active player nationwide in sale-leaseback transactions. Last week, for example, JLL managing director Kenneth Rudy, along with managing director Michel Seifer, wrapped up a deal in which energy giant ConocoPhillips bought Sun Microsystems Inc.’s StorageTek 432-acre campus in Louisville, Colo., for about $58.5 million, with JLL representing Sun, who is leasing the campus back.As sale-leasebacks go, the deal is fairly short-term – Sun will be moving out of the campus steadily throughout 2008 – but the deal nevertheless excited a lot of interest…

Grubb & Ellis Realty Investors L.L.C. sold 2800 East Commerce in Tucson, Ariz., to Hidden Willows L.P on behalf of tenant-in-common investors.  The financial terms of the transaction were not disclosed.The 136,000-square-foot office building is 100 percent leased to Intuit Inc.  Built in 1999 on 15 acres, the building contains an onsite fitness center, a full-service cafeteria with an outdoor patio, and onsite educational and recreational accommodations.  The property also includes a parking lot with 1,100 spaces  Ryan Gallagher of Grubb & Ellis Co. and Thomas Nieman of PICOR Commercial Real Estate Services were the brokers in the transaction.

AMB Property Corp. has fully leased its 199,000-square-foot Los Angeles-based facility to USC Intermodal, a Southern California-based third party logistics supplier.AMB Clipper Distribution Center is located in Los Angeles’ South Bay submarket. USC Intermodal has leased the property to accommodate its expanding presence in the South Bay.”The South Bay benefits from two powerful demand drivers: access to Los Angeles International Airport and the Ports of Los Angeles and Long Beach, as well as proximity to the huge and growing population base in Southern California,” AMB president Gene Reilly said in the release. “The rail-served AMB Clipper Distribution Center benefits from…

ProLogis has leased 730,000 square feet of space at ProLogis Parc Tosu, a major new industrial park being built in Japan’s Saga Prefecture, a key logistics and manufacturing hub for the southeast region. Coca-Cola West Logistics, a group company of Coca-Cola West Holdings, has leased approximately 586,000 square feet of space in a 730,000-square-foot distribution facility located at the park. The balance of the building is leased to Hitachi Transport System, a global provider of third-party logistics services, bringing the first phase of development at the park to 100 percent leased.Both Coca-Cola and Hitachi Transport System are three-continent customers for…