Trends & Insights
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Trends & Insights
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At Northmarq, we are committed to offering our clients the latest trends and expert analysis to power their decision making. Our MarketSnapshot suite of reports contains critical market data covering a variety of commercial real estate property sectors. In each report, you will find: Investment sales volume data Average cap rate information Buyer distribution analysis... and more! Single-Tenant Overall Market Single-Tenant Office Single-Tenant Industrial Single- Tenant Retail Multi-Tenant Retail
Hanahan Medical Office Building Fetches $8.2M; 2nd Co-Working Firm Eyes Downtown Charleston
Originally published by The Post and Courier A Hanahan medical office building on a shopping center outparcel recently changed hands for $8.225 million. Harbor Chevrolet Corp. of Long Beach, Calif., bought the 15,030-square-foot healthcare facility leased by Coastal Kids Dental and Braces at 996 Tanner Ford Blvd. in late March, according to Berkeley County land records. The previous owner of the site in the Lowes Foods-anchored shopping center in Tanner Plantation was North Rhett Ventures LLC, which is affiliated with the owners of the tenant practice. The two-story property was built in 2017 on a 1.52-acre site. The flagship location houses the tenant’s dental and orthodontic practice as well as its office support and executive staff. Northmarq handled the all-cash sale for the seller. Jeff Enck with the broker’s Atlanta office said the property received multiple offers, but closed with a group of West Coast investors. “Medical net lease properties, particularly those with rental increases, continue to be in favor with investors as inflation rises,” Enck said.
May 18, 2022
A View From The Top: How One Woman of Influence Learned the Skills to be Successful in Retail Investment Sales
Originally published by GlobeSt Two years after beginning her career as a financial analyst at Legg Mason in Washington D.C., Margaret Caldwell, then 25, was recruited to the firm’s Charlotte office to be a producer. “I thought I was going to be more of a junior producer, but that was not the case,” she says. “The first day I arrived I was provided an office and was told that I was responsible for generating my own production with no support. I felt like I had been dropped in the deep end without water wings.” Caldwell, now Senior Vice President & Managing Director at Northmarq in Atlanta, says in hindsight “this was one of the best learning experiences ever for someone with my personality. The word no from potential clients made me work harder,” she explains. “I went from being an analyst to a self-taught full service production team consisting of just me. I learned how to cold call, network, establish relationships that would be extremely important to my future success.” Caldwell will elaborate on that experience (and more) during her 1:1 Unplugged: A View From The Top talk on the first day of the GlobeSt Women Of Influence conference in Deer Valley later this month, where she’ll discuss the journey she took to get to where she is today. After a year in Legg Mason’s Charlotte office, she was recruited to join a successful office investment sales team, spending the next 4 years at Binswanger in their Charlotte and New York offices focused primarily on office investment sales. In 2000, her husband’s job brought them to Atlanta, where she was recruited by many top national investment sales shops – which she attributes to her ability to “persistently work a deal.” She then accepted a position on an investment sales team at Cushman & Wakefield, where she spent seven years, followed by another 12 at JLL. She has been with Northmarq for almost three years. Success, she says, comes from within – and requires skills, passion, drive, perfection, and problem solving ability. But “the people who you work with lead to success” as well she says. “You cannot do it without a team.” © 2022 ALM Global Properties, LLC. All rights reserved.
July 26, 2022
Northmarq Completes $7.6 Million Sale of Planet Fitness-Anchored Shopping Center in Tallahassee, Florida
Northmarq, one of commercial real estate’s leading investment sales brokerage firms, has completed the sale of a 59,160-square-foot retail center anchored by Planet Fitness. The north Florida property is located at 1925 North Monroe Street in Tallahassee, Florida. Northmarq’s Brett Puckett represented the seller, an individual investor based in Tennessee. A private 1031 exchange buyer acquired the property for $7.6 million. “This is our team’s sixth Planet Fitness-related transaction in the past year and speaks to the strength of the Planet Fitness name and our timing in the market,” said Puckett, Associate Director in Northmarq’s Cincinnati, Ohio office. “We achieved our win/win objective by exceeding our seller’s pricing expectations and having a buyer walk away satisfied with a fantastic investment property.” The property, minutes from Interstate 10 in north central Tallahassee, is situated on 4.93 acres and was built in 1977. In addition to Planet Fitness, the retail center includes two additional tenants and neighboring tenants include Publix, Starbucks, Walgreens and more national retailers. The tenants operate on long-term triple net leases.
September 16, 2022
SomeraRoad Sells Off Cheesecake Factory Restaurant Anchor at SouthSide Works
Originally published by Pittsburgh Business Times SomeraRoad has sold off the real estate of one of the SouthSide Work's key hospitality anchors as it continues to reposition the next complex with its new "micro neighborhood" approach. A new owner based in New York called Regal Ventures bought the Cheesecake Factory restaurant property at the heart of the SouthSide Works, paying $7.1 million for the property. The restaurant, known to draw more than one million diners a year, will continue to operate as normal, as it renewed to a new 15-year lease last year. Ian Ross, founder and principal of SomeraRoad, announced the sale on his LinkedIn account, describing it as part of an ongoing component of executing its business plan. The sale for a restaurant building that totals more than 12,500 square feet in size translates to a price of $565 a square foot, SomeraRoad announced. The sale comes after SomeraRoad had bought the SouthSide Works as a distressed asset in the year before the pandemic, acquiring the nonperforming debt of the asset and then taking ownership with some significant redevelopment plans. Now, the company is touting it was able to find at interested buyer for the property amid a challenging business environment as it works to invest elsewhere at SouthSide Works, with its $85 million apartment development The Park now under construction. The New York-based investment sales broker who helped to bring the deal together, Asher Wenig, of New York-based Northmarq, noted a "major rejuvenation" of the SouthSide Works in a prepared statement and expects "this strong performing Cheesecake Factory will benefit from major growth in the area given the healthy term, rent and percentage rent outlined in the lease." SomeraRoad has invested to redevelop the town square in front of the Cheesecake Factory, establishing three new food vendors there, as part of its bid to achieve a renewal with the restaurant, now selling off the restaurant asset as it works to improve the larger complex. The sale of the Cheesecake Factory property is the second sale of a portion of the SouthSide Works by SomeraRoad, which also sold The Flats at SouthSide Works, anchored by a new Rite-Aid store at the corner of 27th Street and East Carson, in July.
November 14, 2022
Can I Relinquish Multiple Properties in a 1031 Exchange?
If you are using a 1031 exchange to sell one property and replace it with another, are you able to sell a second property as part of the same exchange?The short answer is yes, as long as you can adhere to the deadlines and regulations in the 1031 exchange requirements. The more properties are involved, the more challenging that can be.The details below will help you understand how this works.How to Sell Multiple Properties in a 1031 ExchangeInvestors who want to use a 1031 exchange to defer taxes often ask if they can sell more than one property. You can, but it’s important to remember that you only have 45 days from the first sale to identify replacement properties, and you only have 180 days to complete the entire transaction. It would be best to sell both properties before the replacement property is acquired and follow other 1031 exchange regulations.Typically, a 1031 exchange involves selling one investment property, identifying potential replacement properties within a 45-day identification period, and then acquiring the replacement property(s) within the 180-day exchange period.The 1031 exchange rules say, “If, as part of the same deferred exchange, the taxpayer transfers more than one relinquished property and the relinquished properties are transferred on different dates, the identification period and the exchange period are determined with reference to the earliest date on which any of the properties are transferred.”That means the clock starts when the sale of the first property closes. If you need to sell a second property as part of the exchange, you’ll need a buyer quickly in order to finish everything within the required timeframe.Case Study: An Example of Selling Two Properties in a 1031 ExchangeHow might a sale with two relinquished properties look? Here’s an example:The real estate investor transfers Property A to a new owner on June 1, 2023. The investor has until July 16th, 2023, to identify the replacement property as part of the 45-day identification period, and they have until November 28, 2023, to finish the 1031 exchange, according to the 180-day exchange period requirement.On July 15th - one day shy of the deadline – the investor identifies Property Z as the replacement property, and on August 1st, they transfer a second asset, Property B, to a new owner as part of the same 1031 exchange.Finally, the investor closes on Property Z on September 1st, reinvesting the total, combined proceeds into a single replacement property.The scenario above is completely within the rules, since all deadlines were met, and both properties were sold before the replacement property was purchased.The investor could have identified up to three properties during the identification period and purchased some or all of them, as long as all the regulations are followed, and everything is complete within the 180-day window from the sale of the first relinquished property.Other Important RegulationsIt’s important to remember that to defer taxes through a 1031 exchange, the following rules must also be followed:The replacement property(s) need to have the same or greater value than the relinquished property(s).All of the cash generated by the sale of the relinquished property(s) must be applied toward the replacement property(s).Any debt retired upon the sale of the relinquished property(s) was replaced with new debt or cash in the acquisition of the replacement property(s).Use a 1031 Exchange to Maximum AdvantageIf you’re able to fit everything within the required timeframe, there’s nothing to prevent you from selling two or more properties as part of a 1031 exchange. It’s a great opportunity to trade from multiple small real estate investments into a larger opportunity.However, you’ll need to ensure that the transactions are in the right order and fit within the requirements of a 1031 exchange in order to get the tax deferral benefits you’re looking for.
January 2, 2024
February Economic Commentary: U.S. Economy Giving Off Mixed Signals in Early 2023
End of the year reports released in January showed an economy with little momentum going into the new year. A few of the early reports for January, however, suggest the economy is starting 2023 better than expected. The question is, how long will it last? The Fed’s efforts to slow down demand are bearing fruit. Most supply bottlenecks are easing as well, leading to a better balance between supply and demand that will enable inflationary pressures to continue to ease in 2023. Although inflation is slowing, the Fed is not convinced that price pressures are on a sustainable downward path and consequently has indicated that more rate increases are on the horizon. Consumer Metrics The December Consumer Price Index (CPI) showed year-over-year inflation at 6.5% and the year-over-year figure has now declined for six consecutive months after peaking at 9.1% in June. Additionally, on a month-to-month basis, the December reading declined for the first time since May 2020. The core CPI (excluding food and energy) eased on a year-over-year basis to 5.7%. The Producer Price Index (PPI), which provides an indication of pipeline pricing pressures, also fell in December by 0.5% – the sharpest monthly decline since April 2020. The disinflationary trend is likely to continue as the slowdown in shelter inflation will begin to register in early 2023. Nevertheless, despite the improving trend in inflation, the absolute numbers remain well above the Fed’s inflation target of 2.0%. Retail sales fell 1.1% in December after declining 1.0% in November. Sales have declined three of the last four months and are now at the lowest level since May. Consumers are pushing back on higher prices forcing retailers to offer more discounts and promotions in order to clear inventories. In addition to the contraction in retail sales, industrial production fell 0.8% in December following a downwardly revised decline in November of 0.6%. Housing starts were down 1.4% in December following a 1.8% decline in November. As stated earlier, the economy was clearly losing momentum heading into 2023. Concern about the slowing economy was demonstrated in earnings reports from the big banks. The big six banks reported that $7.2 billion has been set aside for loan loss provisions – the most since Q2 2020.
February 10, 2023
Northmarq Announces $1.65 Million 1031 Exchange of Mission BBQ in Bowling Green, Kentucky
Riley Sharman, vice president in Northmarq’s Houston office, arranged the $1.65 million 1031 exchange for a freestanding single-tenant retail space fully leased to Mission BBQ. The property features a corporate guaranty from Mission BBQ, the growing privately-owned fast-casual restaurant chain. Sharman represented the 1031 exchange buyer, a Florida-based private investor. The seller was a New York-based developer.“The Florida-based buyer capitalized on a strip center sale in Deer Park, TX (Houston MSA) in June and then exercised a 1031 tax-deferred exchange into a newly constructed, 10-Year, NNN ground lease with Mission Barbecue (over 100 locations nationwide),” said Sharman. “He was attracted to the irreplaceable location being an outparcel to a major mall on the busiest thoroughfare in Bowling Green, KY and envisions a long-term hold.”The freestanding restaurant is located at 2631 Scottsville Rd. in an out-lot of the Greenwood Mall with tenants such as Dillard’s and Belk. The 3,375 sq. ft. property is situated with frontage along the main thoroughfare between Greenwood Mall and downtown Bowling Green. Located in a fast-growing market, the single-tenant retail property benefits from Greenwood Mall’s 4.1 million annual visitors and approximately 37,600 vehicles per day on Scottsville Rd. The tenant operates on a long-term absolute triple net ground lease.
September 26, 2023
Long Beach Cannabis Dispensary Sells for $11 M
Originally published by Los Angeles Business Journal A cannabis dispensary in Long Beach known as The Bakerie has sold for $11 million. The 8,288-square-foot retail property is located at 1836 Harbor Ave. It sits on .74 acres. A foreign investor purchased the property from a Michigan-based private investor. Northmarq’s Christian Tremblay and Isaiah Harf represented the seller, while CBRE Group Inc.’s Edwin Mariscal represented the buyer. “This is the largest recorded retail dispensary sale in the state of California, and we are honored to have assisted our client in getting this property sold,” Tremblay said in a statement. “We have seen an increase in demand for cannabis assets due to their attractive yields in the current net lease environment and their high sales on a per square foot basis. Additionally, with the potential of safe banking and lending options continuing to evolve, we anticipate this demand to continue.” In a net lease, tenants can be responsible for everything from maintenance to property taxes. These assets are incredibly desirable to owners because they come with guaranteed monthly income without the burden of maintenance and other expenses, making them a bond-like investment, experts agree. In 2021, net lease investment volume nationwide increased 48% over 2020 levels to $92.1 billion, according to data from CBRE Group Inc. The retail sector, the group found, accounted for 14.5% of net lease properties. Both suburban and downtown Long Beach saw retail vacancy rates of 3.3% during the fourth quarter, compared with the 6% vacancy rate seen in the Greater L.A. area as a whole, according to CBRE data. Asking rent for retail properties in downtown Long Beach was $3.50 a square foot, compared with $2.20 a square foot in suburban Long Beach and $1.81 a square foot in the greater L.A. area. The Bakerie launched in 2020 and its Long Beach dispensary is co-branded with Lemonnade, a cannabis brand.
May 19, 2022