Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed three portfolio sale transactions for a combined $75.5 million. The portfolios were comprised of single-tenant assets leased primarily to discount retailers. Tenants included Tractor Supply Company, Dollar General and Advance Auto Parts, among others. Ryan Butler of Stan Johnson Company arranged the off-market transactions on behalf of ownership. “All three portfolios had weighted average lease terms in excess of eight years and offered a very attractive mix of retail tenants,” said Butler, Managing Director and Partner in Stan Johnson Company’s Tulsa, Oklahoma headquarters. “We worked diligently to evaluate the buyers for each transaction and executed a series of off-market campaigns that resulted in a competitive environment and strong pricing. We successfully closed with three different institutional investor groups who were each pleased to add these high-quality, high-performing properties to their existing portfolios.” In total, the three transactions included 40 properties which were located across seven states.

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a 10-building quick service restaurant portfolio fully leased to Taco Bueno. The portfolio totaled 25,643 square feet, and the properties were located across Oklahoma and Texas. The seller, U.S. Realty Advisors LLC, was a private equity group based in New York. They were represented by Josh Pardue of Stan Johnson Company. The buyer was Centric Capital Partners, a Dallas, Texas-based developer. The portfolio traded for $13.7 million reflecting a 7.22 percent cap rate. “This transaction had a few nuances – explaining the transition from bankruptcy to new ownership, working through a restaurant sale during the pandemic, as well as understanding how to effectively market small cap credits to achieve top pricing,” said Pardue, Senior Director in Stan Johnson Company’s New York office. “The tenancy was recently acquired by a leading operator, Sun Holdings Inc., which was attractive to the buyer. With drive-thru properties being in demand, not to mention the largely Texas-based locations, we saw strong interest from institutions, regional buyers, and private investors alike.” Sun Holdings Inc. acquired Taco Bueno in 2019 to revitalize and grow the brand, and with over 23 years of restaurant experience, the company has built an expansive franchise network with 11 brands across 800 locations and 12 states.

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a 12-property portfolio of single-tenant retail buildings located across 10 states. The 187,884-square-foot portfolio included properties ranging from 4,000 square feet to 26,000 square feet and included five distinct tenant brands in the aftermarket auto parts, eye care and pet supply sectors, among others. Stan Johnson Company’s Zach Harris, Jeff Hughes and Melissa McKenzie represented the seller, a Midwest-based private family office. A joint venture between affiliates of MCB Real Estate, a Maryland-based real estate investment firm, and Blue Vista Capital Management, a Chicago-based real estate investment manager, purchased the portfolio for approximately $28.5 million. Mike Sladich and Maggie Holmes of Stan Johnson Company represented the buyer. The cap rate was not disclosed. “This net lease portfolio consisted of a strong diversification of name-brand essential retail tenant credits which was quite attractive to the buyer,” said Harris, Director in Stan Johnson Company’s Tulsa, Oklahoma headquarters. “We continue to see particularly robust investor demand for these diversified single-tenant retail portfolios featuring established locations and strong credit tenants.” In recent months, Harris brokered the $68.4 million sale of a 27-property portfolio of single-tenant retail buildings across 18 states that also received strong interest from investors.

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has announced the sale of a zero cash flow portfolio fully leased to CVS Pharmacy. The four-building, four-state portfolio of retail drugstores totaled more than 56,000 square feet and sold to a private 1031 exchange investor for approximately $19.2 million. Stan Johnson Company’s Josh Pardue and Zach Pool represented the seller, a leading New York City developer. “We are pleased to have completed a challenging, cross-border CVS portfolio transaction between our New York-based client and an investment fund from Mexico that has deployed significant capital into the net lease sector in recent years,” said Pardue, Senior Director in Stan Johnson Company’s New York City office. “With zero cash flow transactions, the motivations are different than the drivers of traditional net lease transactions. In these transactions, the buyer’s investment focus is typically on wealth preservation and tax strategy, while the seller is traditionally focused on high-yield development, seeking to roll the equity into income-producing real estate.” The properties were built between 2011 and 2013 with absolute triple net leases in place. The assets featured non-recourse, zero cash flow structured financing that was readily assumable. The following properties were included in the sale: 12751 Nicollet Avenue, Burnsville, MN 400 South Truman Boulevard, Crystal City, MO 101 East Hall of Fame Avenue, Stillwater, OK 2115 Union Avenue, Memphis, TN “We structured this transaction with a longer contract to allow the seller to secure a quality South Florida multifamily investment property to exchange into,” Pardue added. “We’re pleased to have navigated the nuances between each drastically different investor, accommodating the requirements of all parties and successfully closing on this transaction.”

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a 27-property portfolio of single-tenant retail buildings located across 18 states. The 340,000-square-foot portfolio included properties ranging from 5,100 square feet to 23,500 square feet and included 11 distinct tenant brands spanning a wide range of retail segments, including dollar stores and discount retailers, automotive suppliers and servicers, farm stores and home improvement retailers. Stan Johnson Company’s Zach Harris, Jeff Hughes and Melissa McKenzie represented the seller, a Midwest-based private family office. An institutional investor purchased the portfolio for $68.4 million. The cap rate was not disclosed. “We received a strong level of interest in this diversified net lease portfolio from a number of very qualified groups,” said Harris, Director in Stan Johnson Company’s Tulsa, Oklahoma headquarters. “The buyer that was ultimately selected was able to move quickly and work towards a successful year-end closing, which was a win-win for all parties involved. We continue to see demand in the net lease marketplace for established properties leased to essential retail tenants.”  

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of an eight-building industrial portfolio across four states. Located in the Southeast and Texas, the portfolio totals more than 200,000 square feet on 70.5 acres. Stan Johnson Company’s Brad Pepin and Jeff Tracy represented the seller who executed long-term, absolute triple net leases at closing. Also representing the seller with legal and other advisory services were Tom Gates and David Maynard of Mirador Real Estate Advisors. The buyer was a New York-based institutional investor. They acquired the sale leaseback portfolio for $28.0 million, although the cap rate was not disclosed. “This sale leaseback transaction brought together a very successful and leading national heavy equipment owner/operator and a proven institutional real estate buyer that will be a great landlord and owner for many years to come,” said Pepin, Senior Director and Partner in Stan Johnson Company’s Tulsa, Oklahoma headquarters. “Stan Johnson Company is very proud of the sale leaseback results achieved during this difficult pandemic environment. We’re excited to have met the expectations of our valued seller and client in this transaction.” The portfolio encompasses eight distribution buildings and service facilities, including one newly built property that features a combination of industrial and office space and serves as the tenant’s headquarters.  

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a portfolio of industrial logistics properties located across four strategic supply chain markets. Together, the properties total approximately 1.9 million square feet and are leased to a diverse mix of public and private, industry-leading tenants. Stan Johnson Company’s Mollie Alteri, Joey Odom, Mike Sladich, Maggie Holmes and Michael Watson represented the seller, an institutional advisor based in New York. An institutional investor based in Dallas, Texas, acquired the portfolio. The price and cap rate were undisclosed. “The industrial sector features a unique ability to serve today’s rapidly changing environment, and investor appetite for net lease oriented industrial assets continues to be at an all-time high,” said Alteri, Associate Director in Stan Johnson Company’s Atlanta, Georgia office. “Both transaction teams performed exceptionally well despite overall market volatility, and we were pleased to see the transaction come to a close.” The entire portfolio encompasses 141 acres, and the buildings range in age, with the newest facility constructed in 2005 and two other properties being renovated in 2020. The four-building portfolio includes the following assets: 2001 Commerce Parkway, Franklin, Indiana 524 North Sara Road, Yukon, Oklahoma 565 Corporate Woods Drive, Bridgeton, Missouri 56878 Kelly Avenue, Morrow, Georgia  

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale leaseback of a four-building medical office portfolio totaling 110,052 square feet. The properties are located at 5 Stevens Street and 601 Halton Road in Greenville, South Carolina, 220 South Pendleton Street in Easley, South Carolina, and 1 Colony Centre Way in Simpsonville, South Carolina. Teresa Lovely and Jeff Matulis of Stan Johnson Company represented the seller and tenant, Jervey Eye Group, who executed long-term leases at the time of sale. The Indiana-based buyer, Cornerstone Companies Inc., acquired the portfolio for $30.5 million. “We generated a lot of interest and offers on this portfolio because of the great history of the practice and the strong Greenville, South Carolina market,” said Lovely, Associate in Stan Johnson Company’s Tulsa, Oklahoma office. “Healthcare real estate remains in high demand during this pandemic, and our ability to close during this time speaks to the commitment of both the seller and buyer.” The four properties in the portfolio were built between 2000 and 2018 with the oldest asset being recently renovated. The one- and two-story medical facilities sit on a combined 14 acres in dense medical corridors in and around the Greenville, South Carolina metro area.    

In our chat with Toby Scrivner, senior director of Stan Johnson Co., we learn more about how pricing differs when comparing portfolios versus single-asset transactions for the same tenant and more. Article originally posted on globest.com When would it make sense to sell a portfolio versus single-asset? We chatted with Toby Scrivner, senior director of Stan Johnson Co., on the subject and so much more in this exclusive Q&A on the subject of net lease. GlobeSt.com: How does pricing differ when comparing portfolios versus single-asset transactions for the same tenant? Toby Scrivner: In our experience, we routinely find that buyers expect a discount when acquiring portfolios of net lease assets versus their single-asset counterparts. Until recently though, we hadn’t really analyzed the data to quantify this perception or theory of a “portfolio premium” – premium meaning that investors will pay a lower cap rate when the transaction size is larger. But many factors can influence an investment property’s cap rate – credit of the tenant, age of the property, remaining lease term – and since not all portfolios are created equal, we see them trade at different cap rates. Therefore, the only way to measure the theory of the “portfolio premium” was to compare sales data for the most commonly transacted tenant/property – and the data actually refutes the theory! Of the 13 often-traded retail tenants we recently evaluated, all but one reported a negative variance in single-asset versus portfolio prices, meaning buyers are regularly paying higher average cap rates when buying in bulk When would it make sense to sell as a portfolio? Scrivner: It depends on the seller’s motivation. If maximum pricing isn’t the top priority, a portfolio sale could make the most sense. For example, a seller might be more interested in minimizing the time required to execute a transaction. Time is a valuable and frequently expensive resource and selling as a portfolio to a single buyer can really expediate the process. Is the same buyer pool going to be interested in both portfolio and single-asset sales? Scrivner: There are definitely buyers who have an interest in both portfolios and single-assets when a specific tenant or credit is involved. That being said, there are buyers that require a certain deal size or dollar amount before they can justify spending necessary time to underwrite the investment. The buyer pool for large portfolios tend to be comprised of more sophisticated, experienced buyers, and as a general rule, the larger the transaction size, the smaller the pool of buyers. What advice do you have for sellers in today’s market? Scrivner: Returning to our analysis, there are likely numerous factors involved in these reported sales that could have impacted the cap rates positively or negatively. But if a consistently higher cap rate can be measured on portfolio sales with similar asset characteristics (credit, real estate quality, lease terms, etc.), how much bigger would the spread be for diverse portfolios, when individual properties are specifically marketed and sold to a targeted, vastly bigger buyer pool? If the goal is to maximize your return on investment when selling a net lease property, the evidence indicates that individual asset sales are the best way to achieve this goal. Click here for more information on our study of portfolio vs. single-asset transactions