Net Lease Retail Investors Embark on Flight to Quality
Following the 2008 crisis, investors that bought during the crisis ended up with assets that later could be resold for a profit. That is according to Ryan Butler, Managing Director & Partner of Stan Johnson Company.
GlobeSt.com recently caught up with Butler to discuss the national net lease retail market, and he believes it is a good bet that history might repeat itself. His recommendation to investors is to acquire high-quality properties, which he expects will perform well long term.
That said, he also notes that volume will be down for 2020 compared to 2019, but “expect to see certain segments of the market hold well.”
Ten years ago, Butler says, there was a flight to quality and credit and that pattern may well be repeating itself this cycle as well. “Conversely, he says, assets with shaky credit or in weak locations will be hard to close.
Stronger underwriting of credit and volume rebounding modestly, are just a few of the national net lease retail trends he expects to see in 2021. "Coming out of this, transaction volume will also be helped by more consistency in the debt markets as well as a higher volume of exchange buyers as product types like hospitality and multifamily—which are traditional down-legs—regain footing.”
His final piece of advice for investors of net lease retail? “This isn’t a time to try to beat the market either way.” He says that market intelligence is changing weekly if not daily right now and making data-driven choices is key.