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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US Commercial Property Service Companies rebound in the Second Quarter
Service companies like Jones Lang LaSalle and CB Richard Ellis are great barometers of market conditions. They may not necessarily indicate that a market is improving, but increases in revenue and profits certainly indicate that there is increased deal flow. A greater number of transactions indicates that there is liquidity in the market related to investment sales and financing. Increase leasing activity can also indicate corporate growth or at least decision making. Whatever the case may be, an increase in the number of transactions occurring in the commercial real estate market place is a positive sign.
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