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Single Tenant Net Lease Report | Midyear 2021

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Shifting Capital Boosts Single-Tenant and Net Lease Opportunities

Single-tenant and net-lease properties continue to be hot with investors on the hunt for low-maintenance assets. Investors such as KKR, which is launching a $3 billion net lease platform, are piling capital into this space. With their reliable cash flow, frequent triple-net lease structure, and longer lease terms, STNLs smooth out volatility and create predictability in a portfolio.

Investors are redirecting single-tenant and net lease dollars into new spaces. For example, retail captured just 20% of all investment into the space in 2020 and through mid-year 2021. Compare that to 31% coming out of the last economic downturn. Retail has also seen relatively less capital as a share of total single-tenant and net lease investment since 2014. Drug store pricing is the strongest within retail, but investors are pivoting their capital elsewhere.

Industrial is benefiting from that pivot. From 2015-2019, industrial accounted for about 39% of investment activity in STNL. It topped 50% in 2020 and has captured 46% year-to-date. Office has broadly held market share at 34% this year, close to its 36% share from 2015-2019.

Private capital is selling these assets. Over the past two years, there has been a net outflow from this sector. Cross-border, institutional, and REITs have all been net buyers during that period. As the economy continues to heal, volume should see further gains. Investors are sitting on record amounts of capital, and with impending tax changes, private capital sources may continue to sell.


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Single Tenant Net Lease Report | Midyear 2021

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El Warner

Vice Chair

Los Angeles - Orange County

As Executive Vice President of Capital Markets, Retail for Colliers International, El specializes in the disposition of large institutional assets across the country. Successfully closing more than $2 billion in transactions, he utilizes his background as a Certified General Real Estate Appraiser and deep-seated knowledge of the industry to maximize value for his clients. He believes brokers must truly understand an asset and be passionate about creating the best marketing plan to create value and separate his team from others.

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Michael Kendall

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After nearly three decades in the industry, Michael Kendall has experience in every aspect of commercial real estate, including brokerage, development, acquisitions, entitlements, asset management and construction. As Western Region Executive Managing Director of Investment Services for Colliers International, Michael and his team specialize in representing institutional owners as well as high-net-worth individuals, local entrepreneurs and private equity funds in the sale of industrial investments, including land.

Having sat on the ownership side of transactions for so many years, Michael has a unique perspective relative to the needs and expectations of investors in today’s dynamic market. He is skilled at negotiating complex transactions and is well respected for his integrity and tenacity.

Since 2015, Michael and his west coast team have closed more than $7.1 billion in individual property sales, totaling more than 62 million square feet. When portfolio sales are included, the totals increase to $12.7 billion and 125 million square feet.

Prior to joining Colliers, Michael was a Senior Vice President at CBRE Group and a member of the firm’s National Partners Industrial Platform. Previously, Michael was Vice President of Development and Director of Acquisitions at Turner Development/Turner Real Estate Investments. Before that, Michael was an Orange County Regional Partner for Koll Development Co.

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Frank Petz

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Boston

Mr. Petz joined Colliers International in 2019 and serves as managing director of investment sales within the Capital Markets team. He brings with him deep experience in the disposition of core trophy assets, as well as a diverse mix of urban/suburban, office, industrial, life science, and land development assets.

Immediately prior to joining Colliers, Mr. Petz led the growth of JLL’s overall capital markets business in New England. Prior to JLL, he served as director of capital markets activity at both Eastdil and CBRE, and ultimately built his capital markets foundation on the buy-side at AEW Capital Management for the first 15 years of his career.

NOTABLE TRANSACTIONS

OFFICE

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  • 18 Tremont Street, Boston | $103M
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  • 99 Bedford Street, Boston | $51M

INDUSTRIAL

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  • Franklin Light Industrial Portfolio | $77M
  • Boston Business Industrial Park | $64M
  • Clarion Distribution, Bridgewater | $28M

LIFE SCIENCE / LAB

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  • Hartwell Innovation Campus, Lexington | $228M
  • 27 Drydock Avenue, Boston | $147M
  • Blackstone Science Square, Cambridge | $80M

LAND

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  • Gillette/Channelside, Boston | $218M
  • Suffolk Beacon Hill, Boston | $58M
  • Portland Gateway, Portland, ME | $21M

EQUITY PLACEMENT

  • 125 Summer/745 Atlantic, Boston | $392M
  • Fenway Centre Development, Boston | $260M
  • Gutierrez Industrial Development, Northborough | $82M
  • Novaya high-bay distribution, Industrial Portfolio | $73M

 

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Anjee Solanki

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In Anjee’s current role, as National Retail Director for the USA, she has developed strong relationships and strategic leadership to over 500 + retail professional nationally across 140 markets within Colliers for Investment Sales, Agency, Retailer Rep, and Retail Asset & Property Management.

Anjee Solanki brings 30 years of focused retail real estate experience to Colliers International.  She provides strategic retail advisory services to enhance value for her clients with her expertise in lifestyle, community, power center, neighborhood, mixed-use retail/residential, and resort retail. 

She has developed and manages strong working relationships with institutional and private clients such as State of Florida, State of Michigan, Heitman, Invesco, Grosvenor Americas, American Realty Advisors, TH Realty, PNC, and Zurich to name a few.

Her strategy identifies current market and property inefficiencies to capture untapped value through asset repositioning, releasing, redevelopment, rehabilitation, proactive management, and enhanced marketing. 

Creative problem-solving is her specialty, and she becomes a key stakeholder with national and international retailers, such as JPMC, Opry City Stage/Ole Red and Tim Hortons, and many others. Her highly focused approach reduces the risk profile and provides clients with a thoughtful approach executing strategic multi-year planning initiatives. 

BUSINESS BACKGROUND

Previously, Anjee served as Executive Vice President, Retail Services for Madison Marquette. She successfully assisted with repositioning community centers to lifestyle projects and identified opportunities to create value, resulting in higher returns for her clients. She also provided strategic analysis on complex redevelopment projects to address both the asset’s financial stabilization and/or the client’s exit strategy

BLOG

Anjee continues to be an insatiable collector of all things retail. She’s a student of culture living next door to future shoppers, whose fleeting trends constantly change the retail landscape … driving retailers, landlords and developers crazy! Read her Blog at:  https://knowledge-leader.colliers.com/author/anjee-solanki 

COMMUNITY INVOLVEMENT

Anjee is originally from Southern California and currently resides in San Francisco.  She is active in the Rincon Hill neighborhood residential improvement group, which participates in the public review of the highly anticipated Salesforce Transit Center in San Francisco.
 

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David Amsterdam

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David Amsterdam is President, U.S. Capital Markets and Northeast Region. He is responsible for managing and executing investment sales, debt & equity and structured finance transactions across the U.S. and in critical global markets. In addition, he leads the firm in top-tier cities, including New York, Boston, and Washington D.C.

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Aaron Jodka

Director, National Capital Markets Research

Boston

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With a deep understanding of markets throughout the country, he provides a unique perspective on market dynamics across asset types and investment strategies, providing clients with tailored data and analytics to ultimately guide decision-making solutions.

Before joining Colliers, he spent 11 years with Property & Portfolio Research (PPR), now CoStar Portfolio Strategy. There, he advised institutional clients on their commercial real estate investment strategies across property sectors and also spoke at industry events, quarterly CoStar webinars, and in front of client audiences. Aaron also led and directed a team of economists who monitored property markets across the United States. Near the end of his tenure, he helped establish a new business unit at CoStar, leading in the hiring, training, and coaching of a team of 50 market analysts. 

Outside of the office, Aaron can be found cheering on his children at their extracurricular activities. He also enjoys hiking, travel, relaxing at home or at the lake, or plugging away at one home project or another. Last but not least, he's an avid fan of Boston sports teams.

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