The Real Deal New York

Sale-leaseback activity up 40% to $75B

Corporations look to cash in on hot market
April 04, 2018 11:15AM

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.

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