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"We don't believe that 1031 exchanges will slow in the near term," said Camille Renshaw
NEW YORK, NY, March 10, 2020 /24-7PressRelease/ -- While COVID-19 continues to impact people, markets and business, Camille Renshaw, CEO of B+E, today addressed the impact the virus is having on NNN real estate and offered 11 key areas for review in a letter to B+E clients.
1031 exchanges and US Net Lease real estate will remain strong
* 1031 exchanges
"We don't believe that 1031 exchanges will slow in the near term," said Renshaw. "People will continue to sell real estate and continue to look to minimize taxes, retire, pass along generational wealth, etc. However, 1031 exchangers will more likely look online and conduct business remotely for new properties."
* Foreign investors will continue to flock to U.S. Net Lease real estate
This is not a new trend, as foreign investment in U.S. Net Lease has increased by $8 billion annually for the last five years, and in 2019 increased by roughly $9 billion, the second-largest year over year growth on record. "Top buyers historically have been Canada, South Korea, China, Germany, Spain, and Switzerland," said Renshaw. "U.S. Net Lease properties, especially those with international brand name tenants, will be a safe harbor in this storm."
* Demand for Net Lease real estate is at its highest yet and keeps growing
Net Lease investment increased by 11% in 2019 to a record $78 billion, outpacing the growth of all other commercial real estate sectors. Demand is consistent, but supply is tight. Net Lease is roughly a $7 trillion segment in the US and growing.
Recommended B+E investment sectors
* Most single tenant medical properties including urgent care and pharmacy;
* Distribution centers and cold storage;
* Light and heavy manufacturing as more demand moves stateside;
* Convenience stores and gas stations;
* All car-related uses as people move about strictly in their own vehicles;
* Pet and veterinary uses;
* Retail uses that cannot be found or serviced properly online like boutique luxury shops and cannabis;
* Superstores that blend retail and industrial uses by allowing in-store shopping, pickup, and delivery service such as Whole Foods or Walmart;
* Sale Leasebacks for durable, U.S. middle-market companies.
"Diversity protects long-term cash flow," said Renshaw. "Buy an urgent care center, a distribution center, and a car wash. Don't buy three urgent care properties, even though they are currently seeing a surge in revenue – what if virtual doctor visits eclipse this use someday?"
B+E details the 11 key issues to consider when buying or selling net lease real estate in the current market
* This letter to clients can be found online here.
"After billions in Net Lease sales and varying experiences in multiple market cycles, we know that no predictive analysis is perfect, but also no investor regrets decisive, risk-averse action based on real-time data," said Renshaw.
B+E is a modern investment brokerage firm, specializing in net lease real estate. The firm helps clients buy and sell single tenant real estate. Founded by deeply experienced brokers, B+E redefines trading through an intuitive end-to-end transaction platform comprising of user-friendly dashboards and an AI-driven exchange — all leveraging the largest data set in the net lease industry.
Complementing senior talent with exceptional technology, B+E's proprietary process affords greater speed, unrivaled transaction efficiencies, and stronger asset value. With offices in New York, Chicago, Atlanta, Denver, Tampa and San Francisco, its brokers trade property for clients across the US. B+E allows virtually anyone to confidently trade net lease real estate.
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