Business Lines
Net Lease Properties
Our net lease strategy is to
invest primarily in office, industrial, retail and healthcare-related
properties across the United States that are net leased to corporate
tenants. Net lease properties are typically leased to a single
tenant who agrees to pay basic rent, plus all taxes, insurance
and operating expenses arising from the use of the leased property.
We may also invest in properties that are leased to tenants
for which we are responsible for some of the operating expenses.
At the end of the lease term, the tenant typically has a right
to renew the lease at market rates or to vacate the property
with no further ongoing obligation. Accordingly, we generally
target properties that are located in primary or secondary markets
with strong demand fundamentals, and that have a property design
and location that make them suitable and attractive for alternative
tenants. Additionally, since we principally acquire properties
with long term leases, we also use our real estate underwriting
skills to evaluate the real estate residual value in the event
a tenant decides not to renew at the end of the initial lease
term.
We believe that the majority
of net lease investors who acquire office, industrial and retail
properties are primarily focused on assets leased to investment-grade
tenants with lease terms of 15 years or longer. In our experience,
there is a more limited universe of investors with the real
estate and capital markets expertise necessary to underwrite
net lease assets with valuations that are more closely linked
to real estate fundamentals than to tenant credit. We believe
that well-located, general purpose real estate with flexible
design characteristics can maintain or increase in value when
re-leasing opportunities arise. By leveraging our relationships
and employing our combination of real estate and corporate credit
skills to identify and invest in sectors of the net lease market
where less liquidity exists, we expect to generate risk-adjusted
returns superior to those arising from more traditional net
lease investment strategies. We originate net lease property
investments through intermediaries, our proprietary network
of property owners, developers, corporate tenants and tenant
representative brokers.
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