Net Lease: November 2016

Wednesday, November 30, 2016

The Boulder Group Publishes Net Lease Medical Research Report

The Boulder Group’s Research Department has released a new research report providing comprehensive numbers and analysis of the activity in the National Net Lease Medical Market.

Highlights from the report are as follows:

Overall cap rates for net lease medical properties remained unchanged from the third quarter of 2015 to the third quarter of 2016
Investment grade tenants make up only 35% of the net lease medical sector
Medical properties are priced at a 21 basis point discount when compared to the entire net lease market

The full report can be viewed online at http://bouldergroup.com/media/pdf/2016-Net-Lease-Medical-Report.pdf

About The Boulder Group

The Boulder Group is a boutique investment real estate service firm specializing in single tenant net lease properties. The firm provides a full range of brokerage, advisory, and financing services nationwide to a substantial and diversified client base, which includes high net worth individuals, developers, REITs, partnerships and institutional investment funds. Founded in 1997, the firm has arranged the acquisition and disposition of over $3 billion of single tenant net lease real estate transactions. In 2010-2015, the firm was ranked in the top 10 companies in the nation for single tenant retail transactions by both Real Capital Analytics and CoStar. The Boulder Group is headquartered in suburban Chicago. More information on the firm can be found on The Boulder Group’s website at www.bouldergroup.com

Monday, November 28, 2016

The Boulder Group Arranges Sale of Net Lease Athletico Property

The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant Athletico Physical Therapy property located at 8905 South Commercial Avenue in Chicago, Illinois for $1,025,000. The Athletico Physical Therapy property is located in a densely populated area with significant barriers to entry.

The 4,535 square foot Athletico Physical Therapy building is located on a corner at the intersection of South Commercial Avenue and 89th Street. The property is benefitted by its proximity to the Advocate Trinity Hospital which is located approximately one mile west. Retailers located in the immediate trade area include Walgreens, CVS, Chase Bank, Bank of America, US Bank, MB Financial Bank and McDonald’s. The surrounding area is densely populated with over 26,000 people living within a one mile radius of the property.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller in the transaction; a Midwest real estate investment company. The purchaser was a west coast real estate investment company.

The new Athletico Physical Therapy lease is for ten years and rent is estimated to commence in October 2016. The lease features a 10% rental escalation in the primary term and in each of the two 5-year renewal option periods. Athletico Physical Therapy is in the field of physical therapy, orthopedic rehabilitation, sports medicine and athletic training. Athletico began in Chicago in 1991 and today has over 330 facilities, employs over 4,000 clinical and administrative staff, and offers more than 40 specialty rehabilitation, outreach, and fitness services.

“The market for net lease properties in major MSAs remains active as these assets are in high demand among private investors.” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “We are seeing many investors turn their attention to medical related office properties as they are highly resistant to e-commerce.”

About The Boulder Group

The Boulder Group is a boutique investment real estate service firm specializing in single tenant net lease properties. The firm provides a full range of brokerage, advisory, and financing services nationwide to a substantial and diversified client base, which includes high net worth individuals, developers, REITs, partnerships and institutional investment funds. Founded in 1997, the firm has arranged the acquisition and disposition of over $3 billion of single tenant net lease real estate transactions. From 2010-2015, the firm was ranked in the top 10 companies in the nation for single tenant retail transactions by both Real Capital Analytics and CoStar. The Boulder Group is headquartered in suburban Chicago.

www.bouldergroup.com

Wednesday, November 23, 2016

The Boulder Group Arranges Sale of a Net Lease Best Buy Property

The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant net leased Best Buy property located at 6502 Grape Road in South Bend, Indiana for $9,009,000.

The Best Buy is strategically positioned in a regional retail trade area approximately three miles from the prestigious University of Notre Dame. The University of Notre Dame has a total enrollment of approximately 12,000 students and there are approximately 160,000 people living within a five mile radius of the property. The Best Buy is located along the area’s primary north-south thoroughfare directly across the street from a 920,000 square foot regional mall. Retailers in the immediate area include Walmart Supercenter, Sam’s Club, Costco, Whole Foods, Target, Home Depot, Lowe’s, Meijer, Menards, Kohl’s, Dick’s Sporting Goods and many others.

There are approximately seven years remaining on the Best Buy lease which expires March 20, 2023. The absolute triple net lease features a 3% rental escalation in the primary term and in each renewal option period. Best Buy is a leading retailer of technology and electric products with over 1,700 locations worldwide. Best Buy is an investment grade rated company with a Standard & Poor’s rating of BBB-.

“The market for net leased properties with shorter term leases remains active as investors are attracted to the higher yield these assets generate” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “Real estate fundamentals play an important role in evaluating short-term leased properties.”

www.bouldergroup.com

Friday, November 18, 2016

The Boulder Group Arranges Sale of Net Lease Qdoba Property

The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant net lease Qdoba property located at 3225 Alpine Avenue NW in Grand Rapids, MI for $1,045,000.

The Qdoba property is strategically positioned along Alpine Avenue which is the trade area’s primary north-south thoroughfare that experiences traffic counts of 50,000 vehicles per day. The Qdoba is located directly across the street from Green Ridge Square which is a 406,597 square foot power center that is anchored by Target, Best Buy, TJ Maxx, Bed Bath & Beyond and Michael’s. Additional retailers located in the immediate trade area include Walmart, Sam’s Club, Home Depot, Menards, Meijer, Hobby Lobby, Kohl’s and Burlington Coat Factory.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller in the transaction; a Midwest based real estate investment company. The purchaser was a high net worth individual based on the West Coast.

There are over five years remaining on the Qdoba lease which expires in September 2021. Qdoba recently exercised its first renewal option. The lease features no landlord responsibilities and a 15% rental escalation in the next renewal option period. Qdoba is a fast-casual Tex-Mex chain with over 600 locations and is a wholly owned subsidiary of Jack in the Box.

“Net lease properties with strong residual real estate value are highly sought after amongst the investment community.” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “As there is a limited amount of long term core assets on the market, some net lease investors are seeking assets with shorter term leases in strong retail corridors for higher yields.”

Thursday, November 17, 2016

The Boulder Group Arranges Sale of Triple Net Lease US Bank Property

The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant US Bank property located at 1103 East 9th Street in Lockport, Illinois (Chicago MSA) for $2,100,000.

The US Bank property is strategically positioned at the signalized intersection of East 9th Street and Read Street. East 9th Street is the primary east-west thoroughfare in the trade area. The US Bank property is benefitted by its location within a retail trade area that is anchored by Walmart Supercenter and Jewel-Osco. Additional retailers located in the immediate retail corridor include Walgreens, Aldi, Ace Hardware, Sherwin-Williams, Advance Auto Parts, PNC Bank, Chase Bank, Fifth Third Bank, Taco Bell, Starbucks, Sonic and McDonalds. Lewis University which has a total enrollment of approximately 6,500 students is located three miles west of the property. US Bank is committed to this location as evidenced by their recent execution of a brand new ten year lease extension.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller in the transaction; an institutional investment firm. The purchaser was a high net worth individual.

The US Bank lease is absolute triple net and expires in July 2026. The lease features annual rental escalations of 2.5% and three 5-year renewal option periods. U.S. Bank National Association is the seventh largest bank in the United States based on $416 billion in assets and the fourth largest in the US in total branches. U.S Bank National Association is an investment grade rated company with a Standard & Poor’s rating of AA-.

“The market for properties occupied by major banks remains active as investors are attracted to investment grade rated companies” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “The market for long term leases remains active as these assets are highly sought after amongst private investors.”

About The Boulder Group

The Boulder Group is a boutique investment real estate service firm specializing in single tenant net lease properties. The firm provides a full range of brokerage, advisory, and financing services nationwide to a substantial and diversified client base, which includes high net worth individuals, developers, REITs, partnerships and institutional investment funds. Founded in 1997, the firm has arranged the acquisition and disposition of over $3 billion of single tenant net lease real estate transactions. From 2010-2015, the firm was ranked in the top 10 companies in the nation for single tenant retail transactions by CoStar and Real Capital Analytics. The Boulder Group is headquartered in suburban Chicago. www.bouldergroup.com

Thursday, November 10, 2016

The Boulder Group Arranges Sale of Net Lease Starbucks Property

The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant Starbucks property located at 630 Northwest Highway in Cary, Illinois for $1,650,000.

The new construction Starbucks property is strategically located along Northwest Highway which is the primary thoroughfare in the trade area. The Starbucks is strategically positioned as an outparcel to a Jewel-Osco grocery anchored center. The Jewel Osco center features a Dunkin Donuts that does not have a drive thru and is significantly out-positioned by the subject freestanding drive thru Starbucks. Additional retailers located in the immediate trade area include Walgreens, ALDI, US Bank, Chase Bank, Fifth Third Bank, AutoZone, O’Reilly Auto Parts, McDonald’s and Taco Bell.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller in the transaction; a Midwest based private partnership. The purchaser was a private west coast based real estate partnership.

The new Starbucks lease is for ten years and rent commenced in October 2016. The Starbucks lease features four 5-year renewal option periods with 10% rental escalations in each. Starbucks is an investment grade rated tenant with a Standard & Poor’s Rating of A-.

“Single tenant Starbucks properties continue to be in great demand with private investors.” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “Properties with corporately guaranteed leases and rental escalations throughout remain at the forefront of investor demand because they provide investors with an inflationary hedge.”

Monday, November 7, 2016

The Boulder Group Arranges Sale of Single Tenant Net Leased Walgreens

The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant net leased Walgreens property located at 4385 South Archer Avenue in Chicago, IL for $6,465,000.

The Walgreens property is strategically located at the heavily trafficked signalized intersection of Archer Avenue and Kedzie Avenue. This intersection experiences traffic counts in excess of 60,000 vehicles per day. The property is benefitted by its proximity to Interstate 55 which is located approximately one mile north. Interstate 55 experiences traffic counts in excess of 195,000 vehicles per day. The surrounding area is densely concentrated with commercial buildings and residential homes providing for significant barriers to entry.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller in the transaction; a Midwest based private real estate firm. The purchaser was a Midwest investment company.

The Walgreens is a strong performing store with high reported store sales. Walgreens is committed to this location as evidenced by their recent execution of an early 10 year lease extension. There are over 14 years remaining on the Walgreens lease which expires December 31, 2030.

“Established properties with proven operating histories continue to garner significant investor interest.” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “While single tenant properties are selling in all types of locations; core markets, like Chicago, are at the forefront of investor demand.”

Wednesday, November 2, 2016

The Boulder Group Arranges Sale of Net Leased CVS Property

The Boulder Group, a net leased investment brokerage firm, has completed the sale of a single tenant net leased CVS Pharmacy located at 6820 North Pear Tree Lane in Peoria, Illinois for $4,198,000.

The 10,125 square foot CVS Pharmacy is located just off of the heavily trafficked signalized intersection of West War Memorial Drive and North Big Hollow Road which sees a combined 50,700 vehicles per day. West War Memorial Drive is a primary east-west thoroughfare in the area and a major retail corridor. The CVS Pharmacy is benefitted from strong demographics with over 33,900 people living within three miles with an above average household income of $103,000.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the purchaser in the transaction; a private investor in a 1031 Exchange. The seller was a Midwest based partnership.

There are 20 years remaining on the recently extended CVS Pharmacy lease that expires August 31, 2036. CVS Pharmacy has successfully operated at this location since 1998 and recently executed a new 25 year lease extension demonstrating their commitment to this location. The CVS lease features five 5-year renewal option periods with 5% rental escalations in each. CVS is a publicly traded company with a market capitalization in excess of $104 billion CVS is an investment grade rated tenant with a Standard & Poor’s rating of BBB+.

“The market for well-located net lease properties remains active as these assets are in high demand amongst private investors” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “Established properties with proven operating histories continue to garner significant investor interest.”

Tuesday, November 1, 2016

The Boulder Group Arranges Sale of a McDonald’s Ground Lease in Hoffman Estates, IL

The Boulder Group, a net leased investment brokerage firm, has completed the sale of a McDonald’s ground lease located at 1070 North Roselle Road in Hoffman Estates, Illinois for $2,990,000.

McDonald’s is the sole occupant of the property that features a 4,388 square foot building. The 0.97 acre parcel is located at the signalized intersection of Roselle Road and Golf Road, which experiences traffic counts in excess of 79,000 vehicles per day. The McDonald’s position in front of Party City, TJ Maxx, Savers, and Petland makes it highly visible to customers visiting the center. The property is fully leased to McDonald’s with twenty years of lease term remaining and 8% rental increases every five years in both the primary term and renewal option periods.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the buyer and the seller in the transaction. The buyer and seller were Midwest based real estate investment firms.

McDonald’s is a publicly traded company on the New York Stock Exchange (MCD), with a market capitalization of $101.6 billion. McDonald’s is an investment grade rated company with a Standard & Poor’s rating of BBB+.

“The market for ground leases with investment grade tenants remains strong as investors are attracted to the typical long term leases with rental escalations.” said Randy Blankstein, President of The Boulder Group. Jimmy Goodman, Partner of The Boulder Group, added, “The market for McDonald’s ground leases remains active as investors are attracted to investment grade tenanted properties with long term leases.”

The Boulder Group Publishes Net Lease Drug Store Research Report

The Boulder Group’s Research Department has released a new research report providing comprehensive numbers and analysis of the activity in the National Net Lease Drug Store Market.

Highlights from the report are as follows:

Overall cap rates for CVS, Rite Aid and Walgreens properties experienced an increase in cap rates of 33 basis points
The supply of drug store properties on the market decreased by 23%
Drug stores are priced at a 14 basis point premium when compared to the entire net lease retail market

The full report can be viewed online at http://www.bouldergroup.com/media/pdf/2016-Q3-Net-Lease-Drug-Store-Report.pdf

About The Boulder Group