Single tenant net leased properties are widely misunderstood by the private investor. They can provide steady returns and a hedge against inflation because the tenant pays all of the expenses no matter what they increase. It is, however, important to look carefully at the lease, location, and tenant. Marcus and Millichap’s 2011 outlook is a good read for the private investor. There is much to interpret in this research, however, as the market is changing dramatically. Returns have gone down, and values have gone up as investors turn to safety. Moreover, the amount of available product is down considerably. This bodes well for sellers, but makes it difficult for buyers to find good product.
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Core Assets are also requiring capital infusions
This is a great article for the everyday investor to read. It is a statement on the market and the problems many commercial property owners are facing. It is also interesting to note how organizations with fresh capital are looking to deploy their money. The difference between Madison and other groups is that they are looking for stable assets in core locations around the world rather than distressed assets that require repositioning. As busy as they are, one can extrapolate that even the best assets have their challenges.
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