Net Lease Opportunity

3800 Lapeer Road
Auburn Hills, MI

Price $14,390,000.00

Net Lease Perspectives

Government-Leased Properties Popular With Tenants and Investors Alike

Sale-leasebacks--and generally, leasing rather than owning real estate--is becoming increasingly popular among our federal and state government entities. Much like in corporate America, government at the federal and state levels is finding that it may have better and more essential uses for their capital than having it tied up in real estate ownership, especially in these challenging budgetary times.

About half of the more than 1 million civilian federal employees now work in properties leased, not owned, by the government. At the state level, Arizona and California in particular have been making headlines in recent months due to their efforts to raise capital by monetizing their buildings. Arizona, for instance, raised $735 million by selling ownership interests in state office buildings and other facilities at the beginning of the year; more recently, it sought to raise $300 million by selling bonds backed by lease payments on its Supreme Court building in Phoenix. And California announced in April that it had received significant interest, including offers of more than $2 billion, in a portfolio of 11 state-owned office properties that it is seeking to monetize in a sale-leaseback transaction.

Cap Rate Trends

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