Sale-leaseback activity up 40% to $75B

Corporations look to cash in on hot market

880-888 Broadway
880-888 Broadway

Sale-leaseback deal activity exploded in 2017 as corporations look to cash in on demand for fully-occupied real estate, particularly in manufacturing and healthcare.

Sales of single-tenant, owner-occupied buildings grew 40 percent to $74.8 billion in 2017, according to Real Capital Analytics. The data only includes deals valued at $2.5 million or more.

“On the deals that we are doing right now I’m seeing some of the lowest cap rates on the credit and the product that I have seen in a long time,” Guy Ponticiello of CBRE’s capital markets team told National Real Estate Investor. Demand for healthcare and industrial assets is particularly high, he added.

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But not all properties are in demand. “Where we’re seeing some caution is related to specific pockets, such as big-box retail and suburban office,” Scott Merkle of brokerage Stan Johnson Co. told the outlet.

Last year, ABC Carpet & Home sold and agreed to lease back its building at 880-888 Broadway in Manhattan. [NREI]Konrad Putzier