Higher Cap Rates and More Listings in the Net Lease Retail Market

We finance a lot of NNN deals and are also seeing our clients move towards what they call in the article “e-commerce-resistant and experiential tenants”. Contrary to the piece, I haven’t noticed the 10 basis point increase in the retail cap rates, but I also don’t run a large public REIT. We’re more concerned with the average interest rate for commercial real estate loan products. Things here have remained relatively steady and there are a few non bank commercial real estate lenders that have been financing our development projects at 100% of cost plus pursuit costs. I think the biggest topics in CRE news are the tax changes which could impact owners and their desire to look at sale-leasebacks as an alternative to holding onto the assets. We’ll be ramping up our efforts on that front towards the second half of this year.

-Adam Horowitz, Principal of Lever Capital Partners and President of the Real Estate Capital Alliance

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