Our acquisition team is looking at additional properties and is following the pulse of the triple net market to track trends specifically in capitalization rates to insure the best returns.
Properties will be identified through a variety of sources, traditional real estate brokers, internet listings and alternative sources, such as accountants, lawyers, bankers, and so forth. The investment committee meets weekly to review potential acquisitions. The committee rates and analyzes each property based on a five-factor matrix.
Five Factor Matrix:
•Lease base term
•Tenant credit
•Rental rate vs. market rate
•Area demographics
•Relative cap rate
Ideal Acquisitions Criteria:
•Leases to prominent nationally recognized tenants
•Long-term leases (generally 10 years or more) with investment-grade and other credit-worthy tenants.
•Diversified by location, industry type and size of property.
•Triple or double net leases with the tenant responsible for most (or all of the property’s operating and capital expenditures during the lease term.
•Well-located, freestanding single tenant buildings.
•Properties free and clear of existing debt. (Properties with favorable terms are acceptable but must be reviewed and fit within our financial model).
We review the advantages and downside risks of the acquisition and determines a bid price and maximum price.
Currently we are seeking a Walgreens, which is considered a triple net leased property.
