Trends & Insights

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a Whole Foods Market located at 5600 Magazine Street in New Orleans, Louisiana. The 30,300-square-foot retail property sold for approximately $31.4 million. Jason Maier of Stan Johnson Company represented the 1031 exchange buyer, a New York-based private investor. The seller was a local developer.   “This was a unique, historical property for Whole Foods and for my client, especially because the property is one of only two Whole Foods in the city of New Orleans,” said Maier, Senior Director in Stan Johnson Company’s New York City office. “We are excited to see this strong tenant thrive in an affluent location.”  The historic structure was originally constructed in 1894 as a bus barn and was renovated in 2002 for Whole Foods. The supermarket is situated on 1.65 acres in New Orleans’ Garden District. Neighboring tenants include Walgreens and various local food and service retailers. The property boasts frontage on three main roads – Joseph, Magazine and Constance Street – and is within walking distance of Uptown residents. Whole Foods Market operates on a long-term absolute triple net lease. 

Originally published by Wealth Management As rising interest rates and slowing investment activity in other property sectors force leveraged net lease retail investors and many 1031 exchange buyers to retreat, net lease retail REITs, aggregators and cash buyers are anticipating an extremely active acquisitions environment for the remainder of the year.  “Market dynamics and the competitive set is different than it was a few months ago,” says Chris Czarnecki, CEO of Broadstone Net Lease, a Rochester, N.Y.-based REIT. “We’ve clearly seen the levered buyers, the PE-backed buyer, [and] the secured financing buyer all generally exit the market, which has created a little bit of cap rate relief for us and ultimately, allowed certain asset classes to look more attractive.”  Net lease retail investors continue to focus on and show a preference for credit tenants and those with strong balance sheets. However, many REIT investors, such as Realty Income Corp. and Agree Realty Corp., are seeing attractive risk-adjusted opportunities in the non-investment grade space. And credit aside, investors are increasingly focused on rent escalations and lease terms.  “REITs are gearing up for a big end of year, given yields have risen alongside cost of capital,” says Spencer Henderson, a director in B+E Net Lease’s San Francisco office. “The most active sellers have been institutional, driven to adjust portfolio allocation and unload shorter-term leases or underperforming assets.”  Expecting an active fourth quarter  In 2021, net lease investors closed $21.9 billion worth of deals, according to commercial real estate brokerage firm Stan Johnson Co. Activity spiked during the third and fourth quarters, with close to 64 percent of 2021’s total trade volume being attributed to the second half of the year.  After a very strong end to 2021, however, net lease retail investment activity tapered off the further we moved into 2022. A little more than $7.6 billion in net lease retail deals traded hands in the first half of this year, compared to $7.9 billion for the same period last year, according to Stan Johnson Co.  During the first half of this year, private buyers—including large-scale aggregators of net lease properties such as ExchangeRight—accounted for 69 percent of all single-tenant retail net lease transactions or roughly $5.2 billion. Public REITs, meanwhile, represented 13 percent or $988 million, according to Stan Johnson Co. This is a marked contrast to 2021, when REITs and domestics institutions accounted for close to 40 percent of acquisition activity, primarily due to a handful of entity-level acquisitions/M&As.  “In 2020, and especially 2021, there were a significant number of large portfolio sales, allowing institutional investors and REITs to take market share from private buyers,” says Curtis Hodges, senior vice president of Stan Johnson Co. “But in the first half of 2022, we’ve seen these investor groups pull back, comparatively speaking. If these groups don’t ratchet back on their targets, we could be looking at a boom in activity in the final months of the year.”  Consider Necessity Retail REIT, formerly known as American Finance Trust—the New York-based company completed the acquisition of 81 retail properties from CIM Real Estate Finance Trust Inc. for $1.3 billion during the second quarter. As of mid-year, it had acquired 93 properties for a total of $1.4 billion.  “We pulled back from the market when we felt that there was too large of a gap between seller and buyer—we were not willing to stretch,” said CEO Michael Weil during a recent Q&A session with REIT analysts.  Opportunities in a dynamic market  Indeed, several REITs announced increased acquisitions guidance during their second quarter earnings calls. San Diego-based Realty Income, for example, increased its 2022 acquisitions guidance to $6 billion from $5 billion after an active first half of the year, during which it invested $3.2 billion in net lease properties.  As of mid-year 2022, Realty Income’s cost of equity was essentially unchanged, though its overall cost of capital had increased, according to president and CEO Sumit Roy. In response to an analyst question regarding cap rates and cost of capital, he said: “The question really is around can we generate the right spread to move the needle on the overall AFFO per share growth, and the answer is ‘yes.’”  Likewise, Agree Realty Corp. achieved a record in investment activity during the first half of the year, adding 205 properties totaling $827.6 million to its existing portfolio, according to President and CEO Joey Agree. The REIT acquired the properties at a weighted-average cap rate of 6.1 percent.  That investment activity, coupled with a strong pipeline and a “superior cost of capital,” has compelled the Bloomfield Hills, Mich.-based net lease REIT to increase its acquisition guidance twice so far this year, according to Agree.  Last year, the company invested or committed to a record $1.43 billion in 297 retail net lease properties. At the beginning of 2022, the REIT sets its acquisition guidance between $1.1 and $1.3 billion. Its new guidance range of $1.5 billion to $1.7 billion represents an increase of 30 percent to 36 percent.  Agree executives said the REIT was ready and able to “take advantage of opportunities in a dynamic market.”  All-cash buyers, including high-net-worth individuals and family offices, are also positioned to take advantage of current market conditions. These buyers are “essentially immune” to rising interest rates and are far less concerned with market volatility, experts say.  “This group had trouble competing in the recent lower interest rate environment, but are now very competitive as many competitors are facing negative leverage,” notes Randy Blankstein, president of net lease brokerage firm The Boulder Group.  Both domestic and foreign institutional investors remain interested in net lease retail since it offers much less downside volatility compared to other retail real estate investments. “On the buy side, as cap rates soften, we expect more institutional buyers to have access to deals that wouldn’t have been accessible earlier this year,” says Alex Sharrin, senior managing director of capital markets with real estate services firm JLL.  Looking beyond investment-grade tenants  The most appealing net lease retail assets are those that are considered essential, service-based and “Amazon-proof”: grocery, quick-service restaurants/convenience stores and medtail. Investors have favored these assets since the pandemic began, and as consumers wrestle with rising costs for necessities due to inflation, net lease investors are increasingly interested in discount retail.  “These particular sectors are most appealing because they are providing necessity-driven goods and services that people continue to require regardless of economic circumstances,” says Joshua Ungerecht, managing partner of ExchangeRight. As of mid-year, the investor had acquired $507.6 million in 104 assets.  However, two investment-grade credit superstars in the healthcare/pharmacy space—CVS and Walgreens—may be losing some of their sparkle. In fact, many buyers are approaching these brands with caution. “We saw Walgreens and CVS caught up in the opioid lawsuits, so [investors and brokers] are watching that closely as large payouts loom,” says Henderson.  In times of economic uncertainty, investors flee toward quality and choose to focus on primary markets and strong balance sheets, Blankstein says. But while investors continue to show a preference for credit tenants, there’s significant interest in non-investment grade tenants too. Roughly 62 percent of Realty Income’s retail deals during the second quarter were sub-investment grade or non-rated.  “There are points in time where the risk-adjusted returns on investment-grade credit is far superior to what we were seeing on the non-investment-grade side, and we pivot there and try to do those transactions,” Roy noted during the REIT’s second quarter earnings call. “And then there are other times where the exact opposite is true, where sub-investment grade is allowing you to capture risk-adjusted returns that are far superior. And so, we find ourselves in that top line today where we are finding very good opportunities on the non-investment-grade side of the equation.”  Credit aside, the largest shift in sentiment relates to lease terms, according to Jeffrey Cicurel, director of capital markets with JLL. “Rising rates and inflation have caused net lease buyers to become more willing to take on shorter term leases, particularly ones with replaceable rents,” he says.  Additionally, as inflation rates outpace annual rent escalations for most net lease retail properties (which tend to be no greater than 3.0 percent), investors are scrutinizing rent escalations more carefully than in the recent past.  “Investors are now almost exclusively looking at leases with rent escalations,” notes Henderson, whose firm recently sold a Tesla service location in Ann Arbor, Mich., for $22.5 million and a 5.4 percent cap rate. “Flat leases are becoming less favorable, given the rapid rise of inflation.”  The good news is that many national retailers are increasingly amenable to higher rent growth and more frequent increases. Agree has witnessed that willingness with his REIT’s “sandbox” of retailers. “While we were seeing potentially one bump or five percent bumps every five years, retailers today, given the inflationary pressures, are more amenable to seeing 10 percent bumps or multiple bumps during the base term and then continuing through the options,” Joey Agree notes.   

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a multi-tenant property portfolio leased to Child Development Schools, Inc., the seventh largest early education and childcare provider in the country. The five properties are located in the cities of Wilson, Kenly, Benson, Garner and Selma, North Carolina and total 31,421 square feet. Milo Spector represented the seller, a private investor based in Wilson, North Carolina. The Raleigh-based buyer acquired the properties for approximately $5.7 million.  “This is a unique transaction due to the size of the portfolio and the low price point comparatively to other early education portfolios of its size,” said Spector, Director in Stan Johnson Company’s Walnut Creek, California office. “This transaction demonstrated the value of diversification that is desired by investors who don’t necessarily have $10+ million to spend. The small portfolio space is a very unique space that allows smaller investors to still accomplish these diversification goals.”  The established tenant, Child Development Schools, Inc., was founded in 1988 with over 200 locations. All five properties are located within 45 miles of downtown Raleigh, one of the fastest growing cities in the country. Each asset operates on a triple net lease.  “There was a lot of demand for this portfolio, and we were able to source multiple offers, but ended up securing a local buyer, demonstrating our company’s ability to reach both national and regional buyers,” added Spector.  

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a four-star skilled nursing facility located at 13960 Plantation Road in Fort Myers, Florida. The 57,650-square-foot building is fully leased to Lee Memorial Health, a Southwest Florida community-owned health system. The seller was a Florida-based developer. Stan Johnson Company’s Jason Maier represented the 1031 exchange buyer, a private investor based in New York. The asset was acquired for $46.7 million.   “We are excited to have been a part of this dynamic transaction. Fort Myers has been a strong growing market in Florida and has undergone a very rapid expansion in recent years. Lee Memorial is by far the dominant and most prestigious hospital in the area with an unbelievable management and executive team,” said Maier, Senior Director in Stan Johnson Company’s New York office. “We believe the acquisition of this state-of-the-art facility will provide our client with both long-term stable income and huge upside appreciation through rental rate growth and land value appreciation.”  The facility was built in 2018 and is situated on 4.28 acres in a southern suburb of Fort Myers on Florida’s west coast. The property is strategically located in the Gulf Coast Medical Park and is situated on the Lee Memorial Hospital Main Campus with direct access to the emergency room and main hospital building via a reciprocal access agreement. The building serves as a long-term acute care, inpatient, and outpatient facility serving Lee Memorial patients. The Gulf Coast Medical Center houses a trauma center and neuroscience institute, as well as orthopedic, oncology and cardiology services. The property was under a long-term triple net lease at the time of sale, with strong annual increases and is guaranteed by Lee Memorial Health Systems.  

Summary of future growth plans for the top 100 retailers, as selected by brand recognition, expansion rate and frequency of investment sale transactions Average cap rate and sale price information for the most commonly traded retailers Credit rating summary with parent company information Average square footage ranges and store counts for each tenant To download a copy of this report, please provide the following information: hbspt.forms.create({ region: "na1", portalId: "7279330", formId: "3e2edbdd-6ea7-46ff-a1cb-37330248a93e", version: "V2_PRERELEASE" });

Stan Johnson Company, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a retail property located at 4317 Feedwire Road in Centerville, Ohio. The 28,780-square-foot property is leased to Marshalls, the second largest off-price clothing retailer in the U.S. The T.J. Maxx affiliate operates under a long-term triple net lease structure. Stan Johnson Company’s Mark Lovering represented the seller, an individual investor based in Chicago, Illinois. A Vancouver, Washington-based group of investors acquired the asset for approximately $7.3 million.   “Although cap rates for investment-grade net lease assets have remained low, interest rates have risen steeply. This created a rare opportunity for the owner, who had previously been unable to defease a CMBS loan that encumbered the building; however, once rates skyrocketed, their defeasance cost went down, creating the perfect window for the owner to sell this high-quality asset,” said Lovering, Associate Director in Stan Johnson Company’s Chicago, Illinois office. “As the commercial real estate industry continues to adjust to rising interest rates, we expect defeasance requests to continue to trend upwards in the coming months.”  The property is positioned within a 324,000-square-foot power center directly across from a new, 125-acre multi-use development. In addition to its outstanding location, the property benefits from exceptional demographics, with 132,492 residents within a five-mile radius. Neighboring tenants include PetSmart, Target, The Home Depot, Costco Wholesale, Cabela’s and Kroger.

Originally published by GlobeSt In a move that woke up the often “staid” net lease real estate sector, REIT STORE Capital Corp. is being acquired by a partnership between global institutional investor GIC and Oak Street, a division of net lease investor Blue Owl, in an all-cash deal worth $14 billion, GlobeSt.com reported Thursday.  Industry followers said that this represents a “monster” transaction in the net lease sector that provides substantial additional scale to one of the largest existing players in Oak Street and a relatively new net lease investor in GIC.  Jeff Cox, Stan Johnson Company managing partner, tells GlobeSt.com that given the challenges of rising capital costs and potential economic headwinds, “it makes sense that parties involved would pursue this relationship. It also suggests that net lease product remains in high demand and continues to grow as a favored asset class among investors.”  Would Make It Third-Largest REIT  Scott Merkle, managing partner for SLB Capital Advisors, a real estate advisory specializing in sale leasebacks, tells GlobeSt.com that “in the normally staid net lease real estate world, this is a monster transaction” that, if consummated, will result in the take-private of the third largest publicly traded net lease REIT.  “GIC and Oak Street are acquiring one of the most prolific sale-leaseback investors that regularly deploys well north of $1 billion a year.”  As one of the largest sovereign wealth funds in the world, Singaporean-based GIC has been particularly active in U.S. real estate.  The STORE transaction represents GIC’s second investment in the U.S. net lease sector following the formation in 2021 of a new net lease retail real estate platform with RPT Realty.  Oak Street, which had $16.6 billion in AUM as of June 30, 2022, has continued its rapid growth in the sale-leaseback arena, which has been bolstered by its acquisition by Blue Owl in 2021  This year’s Q2 registered the strongest Q2 period sale-leaseback performance in both deal count (236 discrete transactions) and deal volume ($10.2bn) since SLB Capital Advisors began tracking the market.  “While sale-leasebacks are not immune to broader market choppiness, it continues to be an outstanding time for corporate owners of real estate to consider monetizing owned facilities,” Merkle said.  Deal a Bit ‘Unexpected’  David Auerbach, managing director at Armada ETF Advisors, says that the transaction highlights the demand for net lease properties as investors seek yield in the REIT space.  “With so many net lease players, I would not have expected STORE to be the first one acquired, but the move is significant since STORE is an S&P MidCap 400 constituent and follows on the heels of the O/VER merger back in November of last year.  “The transaction is significant as two of the largest players in private equity/sovereign wealth funds are partnering on the transaction and diversifying both parties’ portfolios into desirable net lease assets.”  Colleague Al Otero, portfolio manager at Armada ETF Advisors, notes that “It’s good to see a large real estate transaction come back into the marketplace as activity has slowed precipitously since the Federal Reserve started raising interest rates earlier in the year.  “The willingness of sophisticated investors to step back into the market at this time is a testament to the operating platform, underwriting prowess and asset quality that has been established at Store Capital since its inception.”  © 2022 ALM Global Properties, LLC. All rights reserved. 

Originally published by Commercial Property Executive Industrial outdoor storage has gone from being a niche in the industrial sector often owned by small private investors and mom-and-pop operators to a market estimated at $200 billion. During the past three years, IOS has been growing dramatically and increasingly attracting the attention of—and significant outlays—from institutional investors and private equity firms.  “There is a lot of institutional capital chasing deals right now in the IOS space and it’s happened very quickly. I have two or three new groups calling me every week that I previously didn’t know about,” Zach Harris, a director at Stan Johnson Co. based in Tulsa, Okla., told Commercial Property Executive. “They’ve got committed capital and they’re ready to spend it. There’s definitely a rush to acquire product as quickly as possible.”  The demand for industrial storage space increased during the pandemic as e-commerce exploded and continues to be a significant part of the supply chain as more businesses seek locations for last-mile delivery and also want to be near ports and major industrial corridors. This hot commercial property type is mainly used for truck terminals, trailer storage, container storage, pallet storage and construction or heavy equipment yards. Trucking and truck parking are the heaviest users, particularly by third-party logistics companies.  Some of the biggest players in the IOS subsector include J.P. Morgan Global Alternatives and Zenith IOS, which formed a $700 million joint venture in February to create a national IOS storage platform and are aiming to build a portfolio worth $1 billion within the next two years. They kicked off their joint venture with the acquisition of four facilities in Dallas, including a nearly 27-acre property at 2118 California Crossing about 1 mile from Interstate 35 and 10 miles from Dallas Fort Worth International Airport.  Alterra Property Group closed its Alterra IOS Venture II LP fund in March with $524 million in total commitments, well beyond its original fundraising goal of $400 million. Limited partners in the fund included public and private pensions, endowments and foundations, asset managers, family offices and high-net-worth individuals. Alterra was an early entrant in the IOS market, launching its strategy in 2016.  Also in March, investor and developer Criterion Group and Columbia Pacific Advisors formed a joint venture aimed at deploying more than $2 billion in capital in IOS properties across the U.S. by late 2023. The joint venture’s first acquisition was a 41-property portfolio covering 520 acres across 11 states valued at $360 million. In June, Criterion Group announced the acquisition of eight IOS properties totaling 151 acres for an aggregate purchase price of $45.3 million. Criterion’s IOS portfolio now has 50 properties in 13 states valued at $550 million, including its first purchases in North Carolina and Virginia.  In June, Iconic Equities, a Miami-based real estate investment and development firm focused on industrial assets, and Leste Real Estate U.S., the real estate investment strategy of alternative investment manager Leste Group, formed a programmatic joint venture backed by about $150 million in institutional capital to acquire $400 million of industrial outdoor storage facilities across the U.S.  Iconic Equities—formed about 18 months ago—made IOS investments a core focus within the last six to nine months after focusing initially on more traditional industrial acquisitions and development in markets like Charleston, S.C., and Phoenix, according to Founder & CEO Tim Bishop. In Phoenix, the firm is set to break ground on approximately 1.2 million square feet and acquiring an additional 110,000 square feet in a forward takeout structure.  The joint venture partners are looking for sites ranging from 5 to 15 acres in top U.S. logistics markets including New Jersey; Atlanta, Dallas, Los Angeles; the Bay Area; the Inland Empire; Nashville, Tenn.; Columbus, Ohio; Savannah, Ga., and South and Central Florida.  Their first acquisition was the $9.5 million acquisition of Garnett Storage, a 5-acre storage site in Coral Springs, Fla., which is leased to nearly 300 tenants seeking outdoor storage for boats, trailers, motor homes and commercial vehicles. The joint venture recently acquired a 6-acre IOS site in Fontana, Calif., in the Inland Empire and has deals in contract in the Inland Empire, Los Angeles and Columbus.  Warehouse development in super infill locations near ports and in the major MSAs that typically sacrifice parking spark demand for IOS sites that can provide parking for trucks as well as storage for containers and pallets, Bishop told CPE.  The Iconic team uncovers the opportunities for the joint venture, establishes the deal flow and structures the deal flow while Leste focuses on the capital market side of the transactions.  “From an institutional capital perspective, the reason this has become such an interesting niche over the last six months and really the last several years is it’s under penetrated by the institutions.” Leste Managing Director Josh Patinkin told CPE. “That coupled with really strong fundamentals in rent growth and tenant demand for these types of assets has come together to create a growing niche.”  Chasing Yield  There’s another important reason IOS has become increasingly popular with institutional investors. They are chasing higher yield.  “This strategy affords institutional capital the opportunity for higher yielding investments when their two biggest apprehensions right now are cap rate expansion and interest rate risk,” Bishop said. “When you get higher yield, you’re kind of insulated from that.”  The IOS market is not quite as mature as other real estate asset classes. Many of the properties are still owned by mom-and-pop operators and deals can be off-market or represented by local brokers rather than national brokerage platforms, Patinkin said.  “It’s not a very liquid market,” Bishop added. “There’s a lot of inefficiency in pricing and in evaluating risk and return and it’s especially extenuated in IOS because they’re smaller opportunities, they tend to have less institutional ownership and less of a national brokerage presence.”  Bishop and Patinkin also noted there are high barriers to entry in IOS due to a limited supply and many municipalities frown on these kinds of properties and are not likely to approve new uses in their communities.  “It’s one of the very few strategies where you can say supply is decreasing because a lot of these sites are very infill and tend to get redeveloped into other uses like traditional warehouse and there’s only so many of these permits that are out there,” Bishop said.  The IOS submarket in the Denver region has been growing organically over the past three years with a focus on infill sites close to the city, according to Cushman & Wakefield director Joey Trinkle.  “It’s harder to find buildings with outside storage and lower coverage in a strategic location close to the urban core that is also close to major interstate access,” said Trinkle. “There is higher demand from both the end user and investor sides to finding locations closer in.”  Rising Rents  Similar to the industrial sector as a whole, rents have also been rising in the IOS space, where leasing is priced by the acre rather than square footage.  “A few years ago, we were seeing deals done for outside storage without a building on site for about $5,000 an acre,” Trinkle told CPE. “Now we see $6,000 per acre triple net, which really speaks to the value.”  “Outside storage properties bring a unique mix of users, some are local trucking and transportation companies that are local to Denver. But we also see national credit corporations looking for strategic sites. That’s really who these investors are targeting,” Trinkle said.  Trinkle and Managing Director Matt Trone are currently marketing a 27-acre industrial storage yard/trailer site at 409 W 66th Ave. in central Denver recently acquired by IG Logistics, Imperium Capital’s industrial platform than owns and operates properties with large outdoor storage or transportation components, and Meadow Partners, an institutional middle-market real estate investor, for $19 million. IG Logistics launched last year with plans to invest $250 million in IOS properties and specializes in acquiring and developing infill assets in high barrier to entry, urban growth markets where demand for logistics real estate is driven by e-commerce, with a focus on last-mile facilities.  The central Denver property is a vacant lot that is zoned for outdoor storage and includes a 10,000-square-foot industrial building with about 6,500 square feet of office space, two drive-through service bays and 14 feet of clear height. It’s also situated near the confluences of I-76, I-25, I-270 and US 36 and near the BNSF Intermodal Facility and UP Intermodal Facility.  Trone described the former auto auction site as a “rare and very attractive piece of property” that can be divided down to three or four tenants, with options to share the building and office space, or some can just use the property for pure yard space.  In June, Trone and Trinkle and colleague Steve Hager represented a partnership of Biynah Industrial Partners and Platform Ventures in the $9.5 million acquisition of a 12.2-acre IOS property in central Denver from Prime Inc., in an off-market transaction. BIP, a Minneapolis-based private equity firm that invests in industrial real estate, and Platform, a Kansas City, Mo.,-based real estate investor and asset manager, plan to invest at least $150 million in IOS assets over the next two years.  The Cushman & Wakefield brokers are also marketing the property that has access to the major Denver highways and the two intermodal facilities. The previous owner was only using about 4 acres, Trone said, while the new owners plan to pave the unused land to maximize the space for interested tenants. They expect strong demand since development of infill locations over the past several years has displaced companies that need parking for trailers and heavy equipment.  The renewal rate for tenants in the IOS sector is greater than traditional industrial properties. Harris told CPE. But they also tend to sign shorter leases, generally in the five- to seven-year range, which is attractive to institutional owners looking for value-add assets that will potentially see more frequent rent increases. With demand outpacing supply, owners also don’t need to worry about replacing tenants who leave. Triple net leases can often be found at IOS properties, where operating expenses in general are lower than traditional industrial properties.  Despite the increased investments in IOS in recent months, Leste’s Patinkin says the market is big enough to accommodate all the interested investors—at least for the next two or so years.  But he has advice for those considering investments in IOS: “You have to have really good access to capital because the credit markets are very young in IOS and there’s not a lot of participation yet. So, you have to navigate that. You have to be fairly deep pocketed and have support. You’re not going to get competitive individual small loans on an asset-by-asset basis. You have to know how to access the broader capital markets to navigate this strategy.”