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Market Update

BREXIT - What does it mean for Commercial Real Estate?

The initial negative reaction was due to the shock of the news and the overwhelming sense of uncertainty. Already the stock market has settled a bit. As the policy developments unfold, the market should absorb the news at a more moderate pace.
This will affect the global economy. Uncertainty is no friend to investment decision makers. The sense of hesitancy will weigh on economic growth rates which are already quite anemic across the globe.
Inflation rates will stay low, as will interest rates. The central bankers around the world will continue to keep interest rates low and accommodate the quantitative easing they have conducted over the last few years. Nearly all central banks have hit the floor in terms of driving down interest rates. This will prove to be frustrating for authorities, but bond prices will continue to convey inflation expectations going forward.
Lower economic growth will slow commercial rents going forward, more so in some property types – office and retail – than in others – apartments and industrial. But other macroeconomic news in the U.S. suggests that the broader economic picture is getting better than the first quarter reports were suggesting. Any impact on rents and absorption will not be seen for at least a quarter or two. By then, there should be more clarity on how the Brexit decision will unfold.
Global investors will direct more capital to U.S. property markets. The U.S. real estate market is already seen as a safe haven for investment. The appeal has only increased with the Brexit vote. This added capital will drive up prices in many property markets across the U.S. while cap rates will fall.
The Brexit vote is not legally binding. It requires Parliamentary vote. Best case scenario: it is voted down by Parliament; worst case scenario: it propels other countries in the EU to consider their own “Exit” referendum votes.
Source: REIS Whitepaper by Barbara Byrne Denham, Economist

 

 

           

Arby's | Net Lease Investment | 5.5% Cap Rate | 3,034 SF

26026 Northwest Freeway, Cypress, Texas

Bull Realty is pleased to offer this absolute NNN Arby’s single tenant net lease property for sale, located in Cypress, Texas, in the NW section of Houston. The property is fronted by US Hwy 290 with over 96,000 vehicles per day and is an outparcel to a Lowe’s retail center that includes Panera Bread, Firestone and Wells Fargo. The store is operated by Atlanta based Arby’s Restaurant Group and has 13 years remaining on the primary lease term with four 5 year renewal options. Rents increase an average of 5+% every five years. The immediate trade area features other major retailers and restaurants including Home Depot, Wal-Mart and more. The three mile population is over 60K with an average household income of $129K.

-  13+ years remaining on a 20 year term NNN lease with four 5 year options.

-  5.5% cap rate with 5%+ increases every 5 years.

-  NNN corporate lease guaranteed by Atlanta based Arby’s Restaurant Group, Inc.

-  96,000+ VPD fronting the main thoroughfare, Hwy 290.

-  $130,754 average HH income with a projected population growth of 3.24% within a 5 mile radius.

- Located 21 miles NE of the Houston’s CBD, the 4th largest metro area in the nation.

-  Outparcel to Lowe’s that including Panera Bread, Wells Fargo and Firestone.

Randy Reid, TX #333073, Broker of Record

Call 404-876-1640 

On The Radio

Nancy Miller, President of the National Net Lease Investment Group, Bull Realty, Inc. and Scott Lindstrom, Director of Real Estate and Development with Garrard Group joined Michael in Studio One to share some single tenant property investment tips .

You're invited to contact us at 404-876-1640 if we might be of service in any way.