April 11, 2023

Brisky Net Lease Continues Growth, Expands to North Carolina

MINNEAPOLIS, Minn. (April 11, 2023) – Today, commercial real estate firm Brisky Net Lease (Brisky) announced plans to expand by adding a regional office in Charlotte, North Carolina, effective April 1st. The firm specializes in triple net lease (NNN) transactions and other forms of investment real estate across the United States.

Additional markets are planned with Brisky’s targeted growth strategy. While doing a nationwide search, Charlotte stood out as an excellent fit for Brisky because of its booming economy, diverse talent pool, and appealing quality of life.

“Having a full team of smart, savvy, and client-driven professionals here in Charlotte will allow us to bring our vision and custom-tailored experience to the southeast,” said Brian Brisky, founder and president. Brian added, “The firm has had a great deal of success in the Carolinas already, so coming here made perfect sense.”

Founded in 2010 by Brian Brisky, Brisky is known for excellent client service, transparent communication, and determined results for large institutions, private groups, and individual investors. With more than 90 percent of their 2022 transactions coming from repeat clients, Brisky achieved tremendous results in 2022 and made some excellent strides to continue that trend into 2023.

About Brisky Net Lease

Brisky Net Lease is a commercial real estate brokerage that provides full-scale buyer and seller representation on real estate and triple-net lease properties nationwide. Brisky Net Lease is based in Minneapolis. In 2023, Brisky Net Lease announced plans to open their first regional office in Charlotte, North Carolina. For more information, please contact us at [email protected] or 612-413-4200.

March 09, 2023

Everything to Know About Commercial Appraisals

Commercial appraisals are necessary because, in most cases, the buyer and seller are working towards different outcomes. The buyer wants to pay less, while the seller is looking for the opposite effect – to have the price be as high as possible. This is where a commercial appraisal comes in as the third party that determines the “fair market value” for the commercial property being sold.

The appraiser is called upon to perform market research and come back with an independent value. This fair market value is then used by both the buyer and seller in the transaction for negotiation purposes, as it is considered the generally agreed-upon current value of the property. This makes the fair market value an important part of any commercial appraisal.

In this Brisky blog, we describe what commercial appraisals are, when they are needed, and how they can help. Keep reading to learn more!

What Are Commercial Appraisals?

“Commercial appraisals are the independent assessment of the value of a commercial property. This property could be anything from land to garages to warehouses, multifamily homes, or office buildings.”

Commercial appraisals are performed by the ‘appraiser’ who goes through significant training to learn the rules and practices required to complete an appraisal report accurately and correctly. This type of appraisal is used in many real estate transactions, such as when a property is being sold, refinanced, or insured.

When Are Commercial Appraisals Necessary?

When Buying or Selling a Commercial Property:

If you are buying or selling a commercial property, a commercial appraisal can help you determine the fair market value of the property, which can in turn help you negotiate a fair price and avoid overpaying or underpricing the property.

When Financing a Commercial Property:

If you are looking for financing, like a mortgage or a loan, potential lenders will likely require a commercial appraisal to determine the value of the property. This helps the lender assess the risk of the loan as well as determine the correct loan amount.

For Tax Assessment Purposes:

If you are a property owner, a commercial appraisal can help you assess the value of your own property for tax purposes. This can help you check that you are paying the correct amount of property taxes, so you aren’t hit with a big bill during tax season.

For Insurance Purposes:

If you are insuring a commercial property, an appraisal will help you have a more concrete idea of the replacement value of the property. Knowing the accurate value of the property will ensure that your insurance coverage is enough, in case of damage or loss.

Overall, getting a commercial appraisal can provide you with valuable information about the value of your property, which can help you make informed decisions about buying, selling, financing, insuring, or planning your estate.

Most Important Things to Know About Commercial Appraisals

The fair market value is based on several factors, such as the commercial property’s location, condition, size, recent sales, the market, and potential income.
While the process of a commercial appraisal typically involves a physical inspection of the property, it goes much deeper than that, as the research for the local real estate market can drastically change the valuation. In addition, an analysis of comparable properties that have recently sold can also affect the appraised value. The appraiser synthesizes all the above information and more to calculate the property’s value.
Commercial appraisals are governed by industry standards set by organizations such as the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP). These standards ensure that appraisals are conducted in a consistent and ethical manner. Commercial appraisers must be licensed or certified by their state, and they typically have a degree in real estate, finance, or a related field. They also undergo continuing education to maintain these credentials.

Commercial Appraisal Approaches

The Cost Approach

The cost approach assumes that the price a buyer is willing to pay for a property equals the cost it would take to build an equivalent property. So, to arrive at a value, the appraiser looks at the time and materials used to construct an investment property and estimates the cost (using market knowledge and available data).

The cost approach is often the most used and effective for new properties because the reproduction cost should be similar. However, this is less effective for older properties or that cannot feasibly be replicated in modern times.

The Income Approach

The income approach is the same as above; however, the value of the commercial property is determined by the amount of income it generates. To estimate this, the appraiser reviews cash flow like past financial statements, current rent, leases, operating expenses, and market conditions.

The main benefit of this approach is that it can be used across property types and is relatively simple. The downside is that relying on historical financial accuracy can be challenging, and it may require assumptions about things like rent, expense growth, the future of the market, and vacancy rates.

The Sales Comparison Approach

The sales comparison approach is just as it sounds – that the property’s value is derived from the sales of comparable properties in the same market.

However, it can be difficult to find commercial properties in the same market that are truly comparable or even similar, as location, renters, and slight differences in size, use, or design, can cause drastic changes in value.

Partner With Brisky Net Lease for Your Next Commercial Real Estate Investment

For help finding the perfect NNN investment property, get in touch with the professionals at Brisky Net Lease. Our experienced, professional team can identify the best properties in the best locations — helping you meet your investment goals.

With our extensive commercial real estate track record, you’ll walk into your next lease negotiation confidently and with an experienced team on your side.

February 21, 2023

What Can Commercial Real Estate Investors Learn From Past Recessions?

It isn’t hard to recognize the impact of the last recession on the commercial real estate market. Many developers were left filing for bankruptcy, banks were empty-handed, foreclosed properties were a common sight, and many cities felt the economic impact of empty stores, restaurants, and shopping centers.

However, the last recession is also reshaping the commercial real estate market and its practices in a positive way. With new knowledge, trends, and other banking and business changes, the commercial real estate industry can work to avoid another significant real estate crash by taking what we now know and applying it to future investments and transactions.

Keep reading to learn what we can take from past recessions and how to practice innovative commercial real estate investing.

Lessons Learned – from the Past for the Future

The most significant factors that led to the last real estate crash were overconfidence in the market, a lack of caution in dealmaking, and poor business practices.

Uneducated investors focused too much on growth and not enough on business fundamentals like risk management. High loan-to-value ratios exasperated this further as many people took on more debt in an economic downturn that they could not repay. Many people entered the real estate game late, trying to ride the bubble as the market had boomed in the years before, while others repeatedly refinanced loans to support their spending habits or increased expenses.

Since many lenders, investors, and developers experienced setbacks after the last recession, this new CRE landscape has some difficult aspects. Tighter funding and increasingly cautious lenders have made the market challenging to navigate unless investors have significant assets, ample income, and a successful real estate history.

To truly succeed in the commercial real estate market, investors must be thorough, knowledgeable about the market and practices, and extremely diligent in their property search and acquisition. As always, we recommend working with a broker who can help you determine beneficial investments and walk you through the process.

Lenders & Buyers Exercise More Caution

The last recession led buyers and lenders to exercise more caution when making commercial real estate transactions. Despite more significant profits and less strict loan standards, we saw many lenders fail after the exuberant total costs of loan defaults and foreclosures.

There is a certain degree of risk to any investment, and commercial real estate is no different. After the last recession, many real estate developers lost their wealth after investing in a failed building project, and this was not lost on the average buyer or investor. As a result, many buyers are more cautious when getting involved with large-scale projects — and it’s always good to be cautious. However, we recommend having an expert broker on your team to help navigate any deal you consider.

The Value of Multi-Purpose Real Estate

While multifamily rentals have become more common in recent years, the number of multi-purpose developments has also trended upwards.

Instead of being dependent on the neighborhood and its structure, developers are focusing on building entire communities for their tenants, with a borough-like feel. This results in more demand for housing and businesses in the area, as each property is not an independent asset but part of a growing, revitalized neighborhood. Many of these areas have become highly sought-after, as they are known for their eclectic feel, authentic restaurants, and a wide variety of stores.

Many residential and suburban areas are developing quickly, as developers are creating office buildings, apartment complexes, townhouses, bars and restaurants, shopping centers, gyms, markets, drugstores, parks, and more. Instead of just following real estate trends, developers should focus on adding value to an area for long-term success. In other words, each additional development has the potential to help minimize investor risk by increasing property values in the whole area.

The Investment Services You Need

Our goal at Brisky Net Lease is to be your one-stop shop for all things commercial real estate investment. We know our way around the national CRE environment and can help you find the perfect property for your next investment.

We put a lot of time and effort into underwriting, property evaluation, and education, keeping our clients informed and in tune throughout their investment journey.

To learn more about the various CRE investment services we offer, get in touch with our team!

February 09, 2023

Unique Commercial Real Estate Opportunities in a Rejuvenating Economy

With in-person shopping at a low in 2020, the industry has finally started seeing a comeback. In both 2021 and 2022, brick-and-mortar retail sales saw a huge jump, and many experts believe this will continue into 2023.

Though high interest rates, rising inflation, and labor shortages loom over many industries, increased construction costs and limited building space ensure that retail and other commercial building projects will remain stable in the coming year.

As our economy continues to recover and adjust, we’re looking at unique opportunities investors can take advantage of in the ever-changing commercial real estate market.

Keep reading to learn about our top commercial real estate opportunities that all CRE investors should consider in 2023 and beyond!

An Increase in Redevelopment Projects

Redevelopment projects are ideal investments due to their low carbon footprint, high ESG ratings, existing reputation with consumers, and low building costs.

Because new construction projects are continuing to get more expensive, we’ll see more retail developers and commercial real estate investors focus on redeveloping existing retail spaces. This will help attract new customers and shoppers but is also an excellent opportunity for investors.

Think about a new apartment in an old building — all of the amenities, appliances, and systems are brand new, but the building still has its existing charm. This — and the low cost of renovations compared to a new building project — makes many redevelopment projects so desirable.

As rent levels continue to increase and occupancy levels increase even more, there will be plenty of demand for redevelopment projects, especially in highly populated areas. Many redevelopment projects will see buildings converted for other uses, such as office buildings, apartments, and other industrial projects.

The Evolution of Grocery Stores

Grocery stores will continue to evolve for consumer needs.

The sale of food and beverages on digital platforms like Amazon Grocery, Doordash, and Uber Eats has continued to rise. Still, most of these orders are fulfilled at the grocery store using a delivery service or curbside pickup. To continue evolving with the times, grocery stores must transform to fit our multi-channel world.

This could include extending partnerships to more delivery services or developing their own delivery services to compete with the top food delivery companies. But no matter how much of the grocery shopping process becomes digital, there will always be a need for brick-and-mortar grocery stores due to the nature of the product.

However, as grocery stores become less reliant on employees (see our McDonald’s example below), operating costs will also lower — making them a less intensive CRE investment.

Quick Service Restaurants & Fast Food Chains

Similarly to grocery stores, quick-service restaurants and fast-food chains will also continue to see an evolution in their services which will significantly impact how investors view them.

While these restaurants won’t necessarily need to develop their own delivery services, we’ve already seen how chains like McDonald’s have introduced robots into their operations. These automated employees are leased at a lower monthly price than the average employee, leading to lower operating costs and making them more attractive to investors.

Your Commercial Real Estate Investment Resource

Each of our commercial real estate clients at Brisky Net Lease receives exemplary guidance on their commercial real estate and triple-net lease ventures — staying supported throughout the entire process.

We’re with you through each step of your lease, sale, or purchase and strive to make the experience efficient and seamless!

If you’re ready to get started on your commercial real estate journey, get in touch with our team to get started or check out our site for more information on our services.

December 21, 2022

Experiential Retail & Customer Engagement

In an increasingly digital world, in-person purchases are still the bedrock of retail. Before the rise of the Internet, most of us made non-business purchases in places like malls, warehouse clubs, discount chains, local businesses, and mom-and-pop shops.

The most important thing these establishments share (and what’s kept them around for so long) is a focus on the customer experience or making guests feel welcome and special. In 2021, over forty-eight percent of worldwide businesses identified high customer involvement as a critical factor in the customer’s experience.

But what makes a shopping experience an experience?

Customer Engagement — What Is It?

In its simplest form, customer engagement is how companies actively include clients in their operations. Customers are more likely to complete a purchase if their preferences and well-being are considered throughout their shopping experience. New technology allows retailers to connect with clients using targeted information across multiple channels, whether that’s virtually or physically.

Customer engagement is a large part of keeping retail stores relevant in the digital age. While an individualized approach to customer service can help brick-and-mortar locations stand out from the online competition, it’s really the method that makes a difference.

What Is Experiential Retail?

The main goal of experiential retail is to give your customers an unforgettable in-store experience. You can achieve this in many ways, but it must take place in a physical store — showing off cutting-edge technology, hosting exclusive in-store services or events, and having employees educate customers about your products and services are just a few examples.

Experiential retail is a great way to bring in new customers (and keep loyal ones coming back) because it encourages them to interact with your brand directly instead of passively, like online browsing. For this to work, your in-store experiences must stand out from the competition, but it can’t be purely promotional — the overarching goal for both you and your customers is to complete a purchase.

Advantages of Using Experiential Retail

Experiential retail helps brick-and-mortar stores build a loyal customer base, but how is it actually better for business? According to recent research, brands that prioritize engagement and personalization in their physical shopping experience see a 6-10% rise in revenue three times as quickly as brands that don’t.

Plus, in 2022, the number of people visiting experiential locations like bars, retail stores, and entertainment venues rose by 40%, making it the perfect time to add individualized, interactive features to your customer’s shopping experience.

Here’s why (and how) stores use experiential retail to deliver memorable customer experiences:

It Motivates Customers to Stick With Your Brand

Your business should offer a pleasant outing in exchange for the customer’s time and money, and one of the simplest ways to do this is show expertise on your product or service.

Instructing customers how to use and maintain a product after taking it home shows you know and care about what you’re selling. That way, when clients need to buy an identical or similar product at another time, they’ll feel confident coming back to your business.

It Encourages Interpersonal Interactions

People frequently discuss shopping recommendations in their social circles, and sharing content or reviews about businesses online is now extremely common. This creates a virtuous cycle of experiential marketing that encourages word-of-mouth advertising. As satisfied customers tell their friends about positive shopping experiences, others will learn about your business and keep spreading the word.

It Allows You to Gather Immediate Feedback

With offline promotional events, businesses can collect time-sensitive information and direct responses from their target audience. When customers physically use products and services at a store or pop-up, businesses can conduct real-time surveys to gather information for future product development. Plus, you can send targeted email campaigns after a customer’s visit to inform them of upcoming events or featured products.

Experiential Retail Successes

There are many ways to create a unique customer experience, and while the concept isn’t entirely new, stores have ramped up experiential retail efforts since the pandemic. The following brands are great examples of how a physical retail store can become a consumer destination.

Nike

Nike’s five-story, 55,000-square-foot flagship store in SoHo, New York, has nearly as many interactive features as they do inventory. Whether you want to virtually race famous athletes, try out a new pair of shoes before buying, or learn more about the materials used in their products, Nike thought of it all.

A few of the store’s features include

A basketball half-court with adjustable hoops and digital screens
A shoe customization bar where customers can design and order a custom pair of shoes
Large, wall-embedded touchscreens where customers can search inventory or learn more about Nike products
A treadmill in front of a jumbotron that simulates outdoor runs

Ikea

If you’ve been to Ikea, you already know each trip is a full-blown experience, but you might not know that Ikea is also a master at localization. Before opening a new store, Ikea does thorough research in the area they’re targeting by visiting local consumers’ homes and asking which goods they’re interested in purchasing. This allows them to personalize each location’s shopping experience while encouraging in-person purchases.

A few featured experiences Ikea stores have to offer are

An in-store restaurant with culturally-diverse food options
Full-room layouts customers can immerse themselves in
A shop-as-you-go structure where customers don’t physically put items into a cart until they reach the warehouse at the end of the store

First Things First: Find the Perfect Location

Experiential retail and physical stores will always be a part of how we shop. If you’re looking to become a brick-and-mortar business owner, Brisky Net Lease can help you navigate the CRE landscape and will support you throughout the entire investment process. If you’re ready to get started, get in touch with our team!

December 08, 2022

Everything You Need to Know About Net Lease Retail, Interest Rates & Pricing Resets

When inflation rates started rising in April 2022, consumers worldwide felt the impact of increased energy, goods, and service costs. As it stands, the U.S. faces one of the highest inflation rates in decades.

When price fluctuations begin to affect our daily lives, informing yourself about potential alternative income sources can have a huge impact on financial security. Plus, knowing simple investment concepts like net leases, interest rates, and pricing resets can help you make educated decisions on which investment methods and timing are right for you.

In this blog, we’ll break down everything you need to know about net-lease retail, interest rates, and pricing resets, plus, how Brisky can help find the right CRE investment for you and your finances.

What Is a Net Lease?

The term “net lease” describes a rental arrangement where a tenant is responsible for expenses other than just the monthly rent, like property taxes, insurance premiums, and routine maintenance. Net leases are extremely common in commercial real estate, and one of the most favorable to investors.

The Basics of Net Leases

In order to fully comply with a net lease’s terms, the renter is responsible for all property-related costs, just as if they were the owner.

Utilities, maintenance, repair charges, and other operational expenditures may be included in the agreement. Since net leases incur more expenses, most landlords are willing to take lower monthly payments for this type of lease.

If you’re the property owner or landlord, you don’t have to worry about most operations-related monetary responsibilities. On the other hand, tenants can negotiate lower lease rates in exchange for other expenses they take on from the property owner.

Why Should We Care About Interest Rates?

Interest is the cost associated with borrowing money and one of the most important aspects of the American economic system.

Interest rates influence the cost of borrowing, cost of goods, the return on savings, and are a large part of the total return of most investments. Certain interest rates can also provide insight into future economic and financial market activity.

How do Interest Rates Work?

Interest rates are applicable to the vast majority of financial dealings. Borrowers pay interest as a fee for the use of money from a lender or for delayed payments for a debt. The interest amount depends on the agreed rate, which is why interest rates are sometimes called the “cost of money.” Depending on the interest rate, borrowing the same amount of money can be more or less expensive for the loanee.

In the case of loans, interest is calculated by multiplying the principal by the applicable interest rate.

How Are Interest Rates Determined?

Interest rates are influenced by several factors, including the economy’s health and the supply and demand for loans and credit.

Central banks will raise or lower short-term interest rates to ensure stability and liquidity in the economy, while long-term interest rates are affected by the demand for 10- and 30-year U.S. Treasury notes.

When the government raises interest rates, it increases the cost of borrowing money. As a result, consumers have less disposable income to put toward discretionary purchases when interest rates are high. When interest rates are low, both consumers and businesses benefit from the increased borrowing and spending.

What Is a Reset Rate?

Interest on the principle of a variable-rate loan is calculated on the loan reset date at a rate known as the “reset rate.” The loan terms, including the reset conditions and interest rate computations, should be clearly laid out in the credit agreement between the lender and the borrower.

Any loan with a varying interest rate can have a reset rate attached to it. When the underlying benchmark interest rate or index changes, the loan’s interest rate will also vary, making it a variable-rate loan.

Investment Services You Need

Our goal at Brisky Net Lease is to be your one-stop shop for all things related to NNN investment properties. We know our way around the national NNN investment environment and can help you find the perfect property for your next commercial real estate investment.

We put a lot of time and effort into underwriting, property evaluation, and education, keeping our clients informed and in tune throughout their investment journey.

To learn more about the various CRE investment services we offer, get in touch with our team!

October 06, 2022

Predictions from CRE Investors as Inflation Rises

Inflation in the United States is currently at its highest level since the late 1980s. Commercial real estate (CRE) investors are keeping a close eye on this trend, as it has the potential to impact their portfolios in several ways.

Marcus & Millichap’s recent investor survey suggests that while CRE transactions may level out this year, and investors are still optimistic about the future.

Here are some of the key predictions from CRE investors on how inflation will affect various aspects of the industry:

Interest Rates Will Increase

Rising inflation generally leads to higher interest rates. This is because the Federal Reserve typically raises rates when inflation rises to keep it in check. This can significantly impact CRE, as higher interest rates make it more expensive to finance property purchases and development projects.

There Will Be More Pressure on Cap Rates

Inflation can also lead to higher cap rates, as investors require a higher return to offset the increased cost of living. This is especially true when interest rates rise, making it more expensive to finance property purchases.

Out of all investors surveyed, 14% predict that cap rates will rise by 50⁠—or more⁠—basis points in the next year. Approximately 35% think there’ll be a less significant increase, and 27% expect no change.

Investors Are Split on Whether to Buy or Sell

While some CRE investors are predicting that now is an excellent time to sell due to the current inflationary environment, others believe it’s an excellent time to buy.

24% of respondents say they’d invest in less CRE, while 12% recommend buying more. Those who wish to purchase are pointing towards inflation-resistant properties like hotels, apartments, and self-storage units.

Property Values Will Continue to Rise

Many CRE investors believe inflation can benefit the real estate market despite the potential challenges.

This is because inflationary pressure typically leads to economic growth, which results in more people working and earning higher incomes. As a result, there will be more demand for housing and commercial space.

Rent Will Increase at a Slower Pace

While property values are predicted to continue rising, the pace of rent growth is expected to slow. As interest rates go up, the cost of borrowing increases, making it more challenging for landlords to pass on these costs to tenants in the form of higher rents.

What Does This Mean for Your Commercial Real Estate Investments?

While inflation can negatively impact the CRE industry, investors are primarily bullish about how it will affect their portfolios.

By being aware of the potential effects of inflation and adjusting their investment strategies accordingly, investors can help mitigate some of the risks associated with this economic time.

If you’re a commercial real estate investor, staying up-to-date on inflation trends and how they might impact your portfolio is essential.

Don’t hesitate to contact Brisky today if you have questions about how inflation may affect your CRE portfolio. Brisky Net Lease specializes in commercial real estate investments, and our team would be happy to offer guidance.

August 18, 2022

Pros & Cons of Single-Tenant vs. Multi-Tenant Properties

For investors in commercial real estate, there are several aspects to keep in mind, such as the profit margins, the economic climate, the level of involvement of the owner, and the risk assessment, especially when buying single-tenant or multi-tenant assets.

A clear representation of the drawbacks and the perks of each type of property is essential for moving forward with a substantial purchase.

This article will cover the risks, obligations, and income revolving around investing in single-tenant or multi-tenant properties.

Single-Tenant Properties

In most cases, a single-tenant property will be occupied by an investment-grade company with a NNN lease. These are usually consumer-centered venues in the most profitable locations and are positioned to do well in changing economic climates. This reduces potential shifts in the value, making such assets lower-risk, recession-resistant, and adversity-proof businesses.

Walgreens, Taco Bell, 7-Eleven, and Dollar General are prime examples of single-tenant properties.

Single-Tenant Property Pros

Regarding the benefits of a single-tenant property, they are abundant, especially if the asset is leased under an NNN lease agreement:

Simple, straightforward investment;
Little to no owner responsibility;
Operating on absolute NNN leases;
Tenants are solely responsible for their taxes, insurance, and maintenance;
Cap rates of 5–7% with a possible IRR of 8–10%;
Possibility for building equity over the lease term;
Steady, passive income;
Lower-risk investment.

Single-Tenant Property Cons

Even though the cons related to single-tenant assets are minuscule compared to the pros, the cons are mainly shaped according to your preferences and goals.

No landlord involvement;
Limited say in the maintenance or repairs on the property;
An “all-or-nothing” risk of occupancy, especially if you own a single asset;
Less liquid than other types of investments.

Multi-Tenant Properties

As opposed to single-tenant properties, multi-tenant ones are occupied by more than one tenant.

Such multi-tenant properties are usually in the form of apartment complexes, retail centers, shopping malls, industrial warehouses, multi-family living spaces, healthcare centers, and office spaces.

Multi-Tenant Property Pros

Just like the single-tenant properties, the multi-tenant ones also come with perks, like:

Multiple sources of income;
Vacancy risk spread among multiple tenants; Tax depreciation;
Business deductions;
Increased rental income and up to 9% cap rate.

Multi-Tenant Property Cons

Unlike single-tenant properties, multi-tenant assets are somewhat riskier and demand more active management with capital investments regarding upkeep and repairs.

Income might be less consistent and reliable;
Higher maintenance costs;
Less Unpredictable expenses;
More bookkeeping and landlord involvement; Varied leases can be more complex to manage.

Which Is Better: Single-Tenant or Multi-Tenant Commercial Properties?

The bottom line with both types of commercial properties is that success is possible, and it will mostly depend on the investor’s skills to manage risks and perform substantial due diligence.

The responsibilities surrounding single-tenant properties fall onto the lessee, so there’s very little for the investor to deal with, while multi-tenant properties demand more hands-on attention.

Profit-wise, multi-tenant commercial properties deliver income from more than one source. The vacancy risk is split among multiple tenants occupying the property instead of a single-tenant property.

Contact Brisky Net Lease to Learn More About Your Options

If you’re still on the fence about choosing where to invest your money, you can’t go wrong if you contact Brisky Net Lease. Our team has years of expertise in the triple net industry and is extremely client-focused, aiming to provide the best customer experience.

We offer a full-scale buyer and seller representation as well as different services like off-market opportunities, NNN investments, and more. Get in touch today.

June 23, 2022

How Net-Leased Commercial Real Estate Is Making Waves

Net-lease commercial real estate has been rising in recent years, and 2021 was no exception. The total transaction volume for net-lease assets reached $79.3 billion, up 39% from the previous years. This unprecedented demand is being driven by investors looking for stable and predictable income streams.

Of course, with any investment, there are risks to consider. But for savvy investors, the potential rewards of investing in net-lease commercial real estate outweigh the risks. Here’s a closer look at this growing trend and why you should consider adding net-lease commercial real estate to your portfolio.

What This Means for Investors

The high demand for net-leased assets and a scarcity of supply are driving up prices and lowering capitalization rates. With that being said, it’s still a good time to invest in real estate, here are some reasons why:

Higher Primary Yields

Net lease investments offer primary yields that are significantly higher than other types of assets, such as bonds. For example, the average yield on a 10-year Treasury bond is 2.61%. In contrast, the average yield on a net-lease property is between 5% and 8%. This higher yield is because net-lease properties are leased to tenants long-term, typically 10 to 20 years.

Steady Income with Relatively Low-Risk

Net-lease commercial real estate typically features long-term leases with creditworthy tenants. This means that you can count on a steady stream of rental income for the life of the lease. And because the tenant is responsible for property taxes, insurance, and maintenance in a triple-net lease, you don’t have to worry about unexpected expenses.

Resilience to Industry Volatility

Another benefit of investing in net-lease commercial real estate is that it’s relatively immune to industry volatility. For example, if you own a property leased to a grocery store, you don’t have to worry about the ebb and flow of the stock market. People will always need to eat, so your tenant will likely stay put even during tough economic times.

Versatility to Supplement All Types of Investor Portfolio

Net lease commercial real estate also has the potential to complement any type of investor portfolio. For instance, if you’re looking for a hedge against inflation, net lease commercial real estate can provide it through price appreciation and rental income increases.

Or, if you’re looking for a way to diversify your portfolio, net lease commercial real estate can help with that, too. By adding real estate to your portfolio, you’re diversifying away from stocks and bonds and into a physical asset that can offer stable income and potential price appreciation.

For these reasons and others, net lease commercial real estate makes a good investment. This is because the market is expected to continue to grow through 2022 and beyond, and the potential rewards seem to outweigh the risks. However, as with any investment, it is essential to do your research and consult with experts like Brisky Net Lease for advice before making any decisions.

Contact Brisky Net Lease

Brisky Net Lease is a commercial real estate brokerage firm specializing in net lease properties. We work with investors of all types, from first-time buyers to real estate investment trusts (REIT). If you’re looking to invest in triple-net lease spaces, we can help you find the right property to fit your needs.

Contact us today to learn more.

May 26, 2022

How COVID-19 Changed Today’s Office Space

The way we work is changing, and the office space evolves with it. Technology, globalization, and demographics spurred the evolution of our workplace. However, one of the most influential factors in this change was COVID-19. This virus caused significant disruption to business operations worldwide on a scale never seen before.

Hybrid Work Arrangements

When the pandemic started, many businesses asked their employees to work remotely to slow the spread of the virus. But after the situation improved, some companies realized that the work-from-home model had some advantages.

Around 74 percent of employers are using or planning to use a hybrid work arrangement with their employees. Even though 51 percent of employers prefer using the hybrid model, only 44 percent of employees prefer it.

How Commercial Real Estate Is Affected

The outbreak of COVID-19 left many industries scrambling to adapt. Commercial real estate is no different as businesses grapple with the new reality of working during a pandemic.

The office space sector has been particularly affected as companies rethink their workplace strategy in the face of social distancing guidelines and a potential economic downturn.

Landlords Should Invest in Technology & New Amenities

Landlords should consider investing in new technologies that will help improve the work-life balance of their tenants. Some examples include providing co-working spaces, installing more comfortable seating, and adding soundproofing to the office space.

Additionally, landlords should consider investing in new amenities, such as bike racks, yoga studios, and on-site restaurants.

The Industry Might See a Boom in Investing in Warehouses

While some office spaces are struggling with renewing contracts with tenants, it is another story for warehouses. E-commerce has seen unprecedented growth since the pandemic started.

Companies are looking to get their products closer to consumers by either building new warehouses or leasing space in existing ones. Retailers that started selling online at the onset of the pandemic drove the trend.

Attract Tenants with Pandemic-Safe Measures

The pandemic changed the way we think about office space. No longer is it just a place to go to work – now, it’s a place where we can stay healthy and safe.

As a result, more landlords are investing in technology and new amenities that will help keep tenants healthy. From touchless elevator buttons to air purification systems, landlords are doing everything they can to make their buildings as safe as possible.

Is It Still Worth Investing in Commercial Real Estate?

The real estate industry was affected by the pandemic, like almost every industry. Due to this, many experts ask if now is still a good time to invest in commercial office buildings.

The way we use office space may be changing permanently as more companies allow their employees to work from home. If this trend continues, it could mean that demand for office space will decrease in the future and that demand may move to another sector instead.

The truth of the matter is that many sections of commercial real estate are strong, growing, and trending to continue in this direction! But before making any decisions, you should always understand the current market conditions. Prices for some sectors of commercial real estate have dropped in certain cities, so it may be a good time to buy – or a good time to wait, depending on your location, goals, and industry.

Investing in commercial real estate is a big decision. It’s important to do your research and consider all of your options. To help you make an informed decision, consult with Brisky Net Lease for commercial real estate investment insights.