Category Archives: Retail

Learning about investing in retail properties…including NNN, triple net, and multi-tenant retail real estate

Ep. 193 Derek Waltchack: Opportunities in the Florida Retail Market

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Florida Retail Market Opportunities

On today’s podcast, we talk with Derek Waltchack about the retail asset class with a focus on strip centers. As Derek shares, there is a lot of misinformation about the retail asset class. Many investors steer clear of retail, especially when retail assets like malls are not doing so well — but malls are not the real “bread and butter”. Despite what you may hear, retail is a very stable asset class, especially when it comes to strip centers in good neighborhoods.

Derek also takes us into the new modern world of blockchain, the record-keeping technology behind bitcoin that is used to store digital information in a public database, and which is starting to be used in real estate transactions.

Key Discussion Points
[06:02] How did you transition from broker to owner?
[10:47] What investments are you looking for in Florida?
[18:44] Why did you choose Florida / I-4 corridor for retail investments?
[25:30] What kind of cap rates are you looking for?
[38:42] Where does your debt financing come from?
[31:01] From an underwriting standpoint, what are a few important things you look for when someone wants to bring you a deal?
[33:43] Tell us about blockchain technology that is starting to be used in real estate
[43:00] How can folks contact you?
[44:43] Closing remarks by Eric and Steven

 

About Our Guest

Derek_Waltchack Derek is a partner at Shannon Waltchack based in Birmingham, Alabama. Derek has extensive experience in commercial real estate. In Birmingham, he spearheaded a $4.5 million renovation that transformed a 100 year old warehouse into a cutting edge business center known as railroad square. He also did the first crowd source development in Birmingham, and that development is known as the Stockyard Birmingham. Currently he is working on projects in central Florida.

Derek is also a subject matter expert on bitcoin, blockchain, and how those technologies are impacting the economy, specifically in general and commercial real estate. 

Website: https://shanwalt.com/
Email: dw@shanwalt.com
Twitter: @dwaltchack

Ep. 177 David Beshears: Market Update on Multifamily & Other Asset Classes

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Market Update on Multifamily & Other Asset Classes

David Beshears has been involved in the commercial real estate industry for over 30 years and shares some great perspectives on the four asset classes of commercial real estate, with a focus on the multifamily market.

David breaks up his discussion into the following four areas:

  • Florida population growth projections with focus on I-4 Corridor
  • Industrial market
  • Retail and office market (with a quick discussion on self storage)
  • Multifamily market

Join us for this episode to learn why David sees a positive outlook for those interested in investing in the multifamily market.

“I think we are going to continue to see a tremendous demand for apartments and multifamily housing.”
– David Beshears

 

TIMELINE of KEY DISCUSSION POINTS

[07:05] Florida population growth projections with focus on I-4 Corridor
[18:57] Industrial market
[22:51] Retail and office market (with a quick discussion on self storage)
[36:29] Multifamily market

 

About Our Guest

David Beshears has been involved in the commercial real estate industry for over 30 years. He started Beshears & Associates, a commercial real estate valuation practice, in 1994.

Over the past 25 years, his firm has appraised over 10,000 commercial properties throughout Florida and the United States.

He’s a member of the Appraisal Institute, and a member of the Royal Institute of Chartered Surveyors. He’s also a licensed real estate broker, and a Florida State-Certified General Appraiser in Florida, Georgia, and Alabama.

Investor Resources

You can get in touch with David Beshears via his website at http://www.beshears.net.

Ep. 167 Rob Gidel: Lawfare – Navigating Exclusive Use Clauses in Your Retail Lease

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For retail landlords and tenants, there are various ways in which mutually beneficial partnerships can be formed in order to maximize returns for both parties. Beyond the standard retail lease, you can incorporate specific terms and conditions as negotiated between you and the tenant.

Exclusive use clauses are one key example of this. Incorporating an exclusive use clause in your retail lease is a great way to ensure long-run returns for both you and the tenant. If you look at successful examples of exclusive use in retail leases like Publix or CVS, the benefits are clear.

But with every give, there is some take.

If you plan on incorporating an exclusive use clause into your retail lease, you need to consider – as always – the cons as well as the pros. If you’re not careful, exclusive use clauses can fall heavily in the tenant’s favor, leaving you with a financial albatross.

1031 exchanges net lease investments; exclusive use clausesFor this edition of Lawfare, we have attorney Rob Gidel join us to talk us through the nuances of exclusive use clauses and how to navigate potential pitfalls in your retail lease.

You’ll remember Rob from past episodes in which we’ve discussed areas ranging from 1031 Exchanges and net lease investments, to building a successful partnership with your real estate attorney.

In this episode, Rob gives us an overview of the potential pros and cons of exclusive use clauses and touches on specific points contained commonly contained within them such as:

  • Clause-specific language
  • Blanket restrictions on competition and use outside of original restriction
  • Continuous operation clauses

You don’t want to miss this special Lawfare edition in which we discuss incorporating exclusive use clauses in your retail lease!

 

Ep. 162 Jimmy Clark: Lawfare – 3 Potential Insurance Pitfalls You Need to Address in Your Lease

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As a landlord or property manager, you’ve got a lot of responsibility. From leasing to maintenance, there are a lot of potential risk factors you need to mitigate. One way that you might find yourself in hot water as a landlord is in regards to how insurance issues are addressed in your lease.

When it comes to leasing, it is typical that both you and your tenants will each be held to specific responsibilities and duties. However, there is an additional oneness on your as a landlord to make sure these responsibilities are addressed correctly in your lease. Otherwise, you may be left holding the bag should an issue arise.

This episode, we take a look at some common insurance pitfalls that often go unaddressed until they become an issue.

3 Potential Insurance Pitfalls

Renters Policy – Many multifamily + single family leases require tenants to have renter’s insurance. While this can be a good idea, it can often be poorly executed in the lease. Negligence in enforcing renters insurance often falls on the property manager and/or landlord for not ensuring the tenant does not have valid insurance.

Rent Abatement – If your tenant is granted rent abatement following a casualty at the property, when can you expect to get reimbursed for loss of revenue from this lost rent?

Tenant Improvements - If you are installing tenant improvements, insure it yourself. Leaving insurance on tenant improvements solely to the tenant can open you up to unnecessary risks: preclusive clauses, co-insurance provisions, exclusions, etc.

About Our Guest:

ada compliance, lease insuranceJimmy Clark is the Senior Vice President and Real Estate Practice Group Leader at Harden, one of the southeast’s largest risk management and insurance firms.

This episode, Jimmy offers up three essential tips all landlords need to know about leases. He shares the common insurance pitfalls that you need to make sure are addressed with your tenant(s) when drawing up your leases.

If you want more information on common insurance pitfalls when it comes to your real estate investment, you can contact Jimmy directly at jclark@hardeninsight.com or 813-367-5609

Don’t miss this episode on protecting your lease from common insurance pitfalls!

Ep. 160 John Brewer: The Retail Investment Landscaping is Changing and Restuarants are Leading the Charge

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You’ve probably been hearing talk of the impending “retail apocalypse”. As long-standing retail chains fall by the wayside, retail center and strip mall landlords and investors are starting to get nervous. To listen to some people, you’d think that retail has all but bottomed out.

But you know not to buy into the hype.

A Changing Retail Investment Landscape

Yes, the retail investment landscape is changing, but that doesn’t mean it’s finished. In fact the retail investment landscape is undergoing a phase of rebirth – and restaurants are leading the way.

There is always going to be a demand for brick-and-mortar retail space. The trick is understanding how to meet that demand. Consumer priorities are changing and food, nightlife and entertainment are playing an increasingly important role in those changing tastes.

Where once there may have been only one restaurant concept per retail plaza or strip center, now you may find several operating successfully. And for the most part, this is happening right under investors’ noses. Retail investors and landlords who can recognize this changing landscape now can position themselves above competition.

About Our Guest

restaurant investmentJohn Brewer is a Partner in Azor Brewer Restaurant Advisors. As the ‘South Florida Resturant Guy’, John has over 20 years’ experience in restaurant operations and management. Partnering with retail center expert, Beth Azor (Ep. 142), John lends his expertise in finding the perfect fit for restaurateurs and landlords.

 

If you would like to find out more about Azor Brewer Restaurant Advisors, visit their website. You can also contact John directly at 561-573-7333.

 

 

 

Ep. 158 Leslie Plettner & Jack Boyajian: What Landlords Need to Know About Florida’s Medical Marijuana Industry

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Legalized cannabis is here to stay.

Despite the federal government’s unchanged stance, there has been a recent wave of states pushing for some form of legalized cannabis whether it be medicinal or recreational. With Amendment 2, Florida joined the ranks of other states that have adopted some form of a legitimate cannabis industry.

However since Florida voters passed medical marijuana into effect, there has been some uncertainty as the move faced moral and legal push-back from some business owners and municipalities. Real estate investors and landlords have been faced with some of the more difficult questions regarding the legitimacy of the medical marijuana industry.

Like any burgeoning industry, the market will face some growing pains. But turning away from medical marijuana in its earliest stages may be short-sighted. Medical marijuana and retail cannabis tenants already have demonstrable value; the investment potential is there. Education and understanding can go a long way in bringing you to the forefront of this emerging marketplace.

Leasing to Medical Marijuana Tenants

  • Zoning
  • “Sin Clauses”
  • Tenant Licensing

About Our Guests

legal cannbis Leslie Plettner is the Managing Director of BaseCanna. A lifetime entrepreneur, Leslie’s real estate journey started with designing and transforming under-performing schools before transitioning into a more robust role in real estate development. In 2015, Leslie set her entrepreneurial sights on California’s emerging cannabis market.

 

medical marijuanaJack Boyajian is the CEO of BaseCanna. Having handled over $3 billion in the development, management and conversion convert residential and commercial real estate, Jack focused his interests on the value of the legal cannabis industry after witnessing the demonstrated positive effects of medical marijuana.

BaseCanna offers comprehensive, turnkey real estate solutions as well as operational guidance for tenants involved in medical marijuana or retail cannabis. BaseCanna can help match landlords with licensed, qualified tenants.

If you have more questions about leasing to a cannabis tenant or just questions about Florida’s medical marijuana industry, visit their website.

 

 

Ep. 152 Casey Siggins: Your 2018 Real Estate Lending Outlook

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February marked this year’s Mortgage Bankers Association Conference & Expo. The annual summit serves as a chance for those involved in the real estate lending industry to discuss trends, market cycles and forecast conditions.

Trying to make sense of the real estate lending market?

For the uninitiated investor trying to make sense of real estate lending and financing options, it came seem like a lot to take on. There are a lot of factors that play into the overall conditions of the real estate lending market. The MBA conference is a great way for you to get a gauge on current lending conditions and alternative financing options as well as an idea of what you can expect to see coming down the road via legislative and regulatory changes.

If you can’t attend these conference, that’s okay! Each year, we talk with an industry insider who attended the conference to bring you key takeaways and insights into the world of real estate lending.

This episode, we talk with Casey Siggins, a loan origination expert with Franklin Street specializing in real estate debt and equity. Casey gives us his takeaway from the conference and we discuss what’s going on with the big players: agency debt, CMBS, and bank loans. We also talk alternative financing and lending options as well as construction loans.

Don’t miss this episode for your real estate lending outlook!

About Our Guest:

real estate lendingCasey Siggins is the Director of Loan Origination with Franklin Street Capital Advisors. Casey specializes in the origination of debt and equity for all income-producing properties. Previously a Senior Analyst with Franklin Street, Casey assisted in the transactions of more than $200 million in assets. Casey is actively involved with the Tampa Bay real estate investing community.

You can reach Casey directly at casey.siggins@FranklinST.com or by calling his office at (813) 397-1638. You can find out more about services offered by Franklin Street through their website.

 Resources

 

 

 

Ep. 142 Beth Azor: 5 Creative Strategies for Filling Retail Centers

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We’ve all heard talk and seen the headlines that the retail apocalypse is upon us. Listening to the news, it sounds like brick-and-mortar retail centers are going the way of the dinosaurs. However, that’s really not the case. While retail is definitely in the midst of significant change, it’s certainly not on the verge of collapse. As our guest this episode says:

“Retail isn’t dead, bad retail is dead”

filling retail centersBeth Azor is a commercial real estate broker and owner of Azor Advisory Services. She’s also a seasoned real estate investor focusing on retail properties. Joining Terra Nova in 1986, Beth got her start in real estate assisting with commercial leasing. She handled mainly office leasing but was also involved with retail leasing, which is where her love for that asset class formed. Eventually, she worked her way up to President at Terra Nova, but left to spend time with her family and to focus on her own real estate investing goals.

She now owns five retail centers and an office building that she plans to convert to retail. Beth doesn’t worry too much about the doom-and-gloom talk concerning retail investing, despite the worries of some, Beth sees a sunny future for retail. She has developed creative strategies for both finding and filling retail centers that offer strong returns.

5 Creative Strategies for Filling Retail Centers

  • Feet-on-the-street canvasing and property searches

    • Make physical visits to properties; open a dialogue with retail owners
  • The power of social media
    • “Networking on steroids”
  • Dedicated involvement with local Chamber of Commerce
    • Build trust among chamber members
  • Visiting corporate offices
    • In-person visits can go a lot further than a phone call
  • Small group broker networking
    • Connect with small groups of brokers; find similar interests

Connect with Beth

Ep. 141 Brian Bailey: A Federal Reserve Commercial Real Estate Expert’s Outlook on Florida

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As part of the Federal Reserve’s wide scope of responsibility and oversight, the eight regional branches are tasked with monitoring residential and commercial real estate markets; tracking trends and data in order to more accurately adjust to market fluctuations affecting the economy. These studies provide hard data for the Fed to make economic adjustments, but they can also be a great gauge for real estate investors. Any successful investor will tell you that the ability to forecast changes in the real estate cycle is vital. As much as knowing your market and asset class, an awareness of other economic factors is important for mitigating investment risk.

The Federal Reserve Bank of Atlanta serves as the central bank’s regional authority for the southeast. It tracks real estate markets for the region, including Florida and offers comparisons on a national scale. Our guest this week is a commercial real estate expert with the Fed’s Atlanta branch.

Florida commercial real estate outlookBrian Bailey is a Senior Technical Expert in the Supervision and Regulation Division of the Federal Reserve Bank of Atlanta. Specializing in commercial real estate, Brian tracks and analyzes emerging trends in the southeastern region and provides thought leadership on commercial real estate and guidance for the central bank.

Brian brings a diverse background in commercial real estate finance and acquisitions to the Fed. He has over 15 years of experience in commercial real estate finance, having managed financing for millions of square feet in real estate holdings for several large-scale equity and development firms. Brian received an MBA with concentrations in Real Estate and Finance from the University of Florida and has earned a CCIM designation.

You won’t want to miss this commercial real estate outlook on Florida!

 

 

 

Ep. 138 John McNellis: Retail and Multifamily Investors Won’t Want to Miss This Development Outlook

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Where is retail heading?

development outlookThis is a question we’ve gotten a lot lately from our listeners and investors. With the rise of online shopping through Ecommerce options like Amazon, we’ve been seeing some rapid tightening in retail development across the board. With big-box retail winding down and shopping center investments getting tight, many investors and developers are wondering what comes next.

Our guest this week is an expert on spotting development trends and cycles. John McNellis is a developer, speaker and author. Founder and President of Mcnellis Partners development firm, John has been developing a variety of real estate for over 30 years. Although retail and multifamily have been his primary asset classes, John has development experience in several asset classes.

This episode, John joins us to discuss the development outlook for retail and offers advice for investors looking to make the transition to development.

Development Outlook

  • Retail markets challenged throughout the U.S.
    • Over-building of retail
    • Influx of online shopping
  • Retail going through downsizing cycle
  • Industrial market seeing benefits from Ecommerce boom

Approaching Development

  • Residential: best to start with land and build up
  • Retail: finding a good tenant for anchor is best strategy
  • Risk-management is key to long-term success
  • Rule of thumb: look for investments that earn 2% above cap rate
  • Don’t build on spec

Transitioning to Development

  • Find an experienced partner when transitioning to large or mid-size multifamily developments
  • For first-time developers, find a broker in your area that specializes in the asset class you want to develop
  • Approach the public with a project before taking it to city officials

Investment/Development Advice

  • Development follows job growth
  • Urban Land Institute (ULI) is a great resource for developers

Resources