Address	15412 N. Dale Mabry Hwy
Property Type	Sonny’s BBQ – Restaurant Building
Sales Date	01/27/2011
Sales Amount	$1,457,865
Amount/Sq Ft	$246.09
Prior Sale Amount	$2,150,111
Prior Sales Date	12/7/2000
Exterior Wall	Concrete Block

Address	13179 N Dale Mabry Hwy
Property Type	Wendy’s – Fast Food Franchise
Sales Date	03/06/2012
Sales Amount	$1,700,000
Amount/Sq Ft	$595.24
Prior Sale Amount	$890,…
Prior Sales Date	01/1989
Exterior Wall	Brick

Address	8411 N Dale Mabry HWY
Property Type	Old Albertsons – Supermarket
Sales Date	02/29/2012
Sales Amount	$6,350,000
Amount/Sq Ft	$102.26
Prior Sale Amount	$777,000
Prior Sales Date	01/28/2011
Exterior Wall	Precast Panel

Address	1001 E Adamo Drive
Property Type	Sonny’s BBQ – Restaurant Building
Sales Date	01/27/2012
Sales Amount	$1,176,211
Amount/Sq Ft	$225.00
Prior Sale Amount	$27,500
Prior Sales Date	00/1971
Exterior Wall	Stucco

Address	4020 W Kennedy Blvd
Property Type	Strip Commercial Center
Sales Date	11/15/2011
Sales Amount	$765,000
Amount/Sq Ft	$144.89 (Multiple Properties)
Prior Sale Amount	$650,000
Prior Sales Date	08/04/2011
Exterior Wall	Stucco

Address	4005 S. Dale Mabry Hwy
Property Type	JP Morgan – Financial Building
Sales Date	01/20/2012
Sales Amount	$1,70,000
Amount/Sq Ft	$237.36
Prior Sale Amount	$1,805,000
Prior Sales Date	02/01/2002
Exterior Wall	Brick

Address	1102 Goldfinch Drive
Property Type	Sonny’s BBQ – Restaurant  Building
Sales Date	01/27/2012
Sales Amount	$1,215,692
Amount/Sq Ft	$209.75
Prior Sale Amount	$600,000
Prior Sales Date	09/14/2001
Exterior Wall	Stucco

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Drive-in chain Sonic has closed 11 Florida restaurants, among them locations in Hillsborough, Pinellas, Sarasota, Manatee, Hernando, Polk, Citrus and Levy counties.

Read more: Sonic shutters 11 Florida restaurants | Tampa Bay Business Journal

Comments:  This is another reminder of the need to conduct proper due diligence when purchasing single tenant, net lease properties as an investment.  Sonic’s design and locations frequently make the sites difficult to redevelop for some other use.

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5002 West Waters Av

The real estate story behind GunnAllen is quite interesting.  An affiliated entity purchased the building at 5002 West Waters in 2004 for $9.5m and leased the building to GunnAllen.  The property had originally been owned by financially troubled Tropical Sportswear and the transaction was considered a distressed asset sale.  A parking garage was added to the property and it was sold 2 years later at the top of the market for $7.4m, or $2.1m LESS than the original sale.  A new lease agreement with GunnAllen was executed with the new owners.

GunnAllen management believed it would need the 117,000 sq ft property to accommodate its expansion plans.   When the stock market imploded, the property became an albatross for the company, whose profits were heavily tied to the market.  Management had been attempting to reduce costs associated with the build by either subleasing unused portions of the property or vacating the property entirely.

Regardless of the circumstances, Tampa will now have an estimated 400 additional unemployed people and 117,000 sq feet of office space on the market.  The property will be a challenge to market.  It is a Class A building, but the surrounding area is really better suited for light industrial or transportation, rather than an office fit for a white shoe law firm.  There is a significant common area load on the building making it best suited for a single tenant, unless the price is at a significant discount to factor in the common area charge.

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“Volume of single-tenant property sales has declined, to be sure; RCA reports $3 billion of single-tenant properties changing hands during the first half of this year, which equates to a 60% drop from the same period last year. For retail and industrial properties, transactions are down 70%; for office assets, transactions are down 50%.

But—and here’s the cup is half full point of view—single-tenant property sales accounted for nearly one-quarter of all retail, industrial and office sales during the first half of this year. That, RCA’s report notes, is “a significant rise over the 10-15% market share averaged over the past few years.”….”Sale-leaseback transactions, meanwhile, are down by about two-thirds. “Sale-leasebacks, which accounted for 30% of single-tenant property sales in 2007, have accounted for just 10% in 2009,” RCA reports.”

Comments: There is surprising activity in net lease property sales.   I feel there are two reasons behind the movement:

1.  Flight to quality – Many investors these days are asking for investment grade tenant properties with long term leases (+10 years) because of adverse economic conditions.  These are tenants that are rated investment grade or higher by Moodys (Aaa to Baa3) or Standard & Poors (AAA to BBB).  In a single tenant property, having a long-term investment grade tenant allows you relative financial transparency with the tenant, which theoretically has a sound financial outlook and balance sheet to back the lease.

2.  Demographic shift – We are entering a period in which boomer investors wish to reduce their work load and seek more “hands free” investment strategies that allow them to indulge their time in areas of interest while they are still healthy enough to enjoy them.  Boomer’s that have owned real estate are more likely to investigate net lease investments, because they perceive that a net lease investment is relatively management free (which they are, when compared to multi-tenant properties).

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or email by clicking HERE!

Need to talk to us? 813.514.1070
or email by clicking HERE!

Need to talk to us? 813.514.1070
or email by clicking HERE!