Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/753030
D E C E M B E R 2 0 1 6 / S C T 85 W H AT S O RT S O F R E TA I L P RO P E RT I E S D O H I G H - N E T- worth investors favor these days? Ryan Imbrie is now at work finding investments for two high-net-worth investors repre- senting both ends of the individual-investor spectrum: One of them sold a portfolio of self-storage facilities valued at $22.5 million and is looking at a large, single-tenant net-lease deal, while the other sold an eight-unit multifamily asset and is looking for a small, single-tenant net-lease deal in a rural Oregon community. "Right now many single-tenant net-lease acquisitions are being driven by 1031 exchanges," said Im- brie, a managing director in the Portland office of SVN Com- mercial Real Estate Advisors. "Investors are selling, for exam- ple, multifamily at a low 5 percent cap rate and buying a retail asset with a higher cap rate." Single-tenant retail properties are on the menu for high-net-worth individual investors, with fast-food chains and drugstores among the most sought-after tenants M c D O N A L D ' S A N Y O N E ? BY STEVE BERGSMAN The swapping of certain types of properties through so- called 1031 exchanges can defer recognition of capital gains or losses upon sale. High-net-worth individuals generally invest in strip or neighborhood shopping centers or in sin- gle-tenant net-lease properties, but the bulk of the transac- tion market is in the latter category. "When you are dealing with these high-net-worth individuals, they have a focus on safety," said Imbrie. "They want something tangible to hold for a period of time. Single-tenant net-lease assets can provide them with an attractive cash flow and the safety of a corporate check arriving each month." More important, single-tenant net-lease assets are an easy investment. "With single-tenant net-lease, as compared to mul- titenant, the former provides more of a fixed return with >>