Webjamatom@webjam.comen3015eba7-f103-42b6-8cb8-208acaec3f1124-Oct-2009The high volume of commercial property listings in the market presents a wide variety of opportunities to today’s real estate investor, especially for those who are seeking net lease properties. Although clearly a buyer’s market, the difficulty investors are encountering in securing financing has caused a more circumspect approach in evaluating commercial property listings.

With capital markets severely contracted, the primary focus in any net lease transaction has become the tenant’s creditworthiness. Prudent investors will keep in mind that each kind of property listing has additional elements that deserve special focus. Balancing these factors against the creditworthiness of a tenant in a net lease deal is easier with experienced advisors.

When considering a retail or office property, we counsel net lease purchasers to bear in mind the location of the property and analyze how it may affect future tenants. A structure with the potential to function either as a multi-tenant property or as a single tenant property is also advantageous. These factors will come into consideration at the end of the lease term when costs to retrofit the space for a new tenant affect the investor’s return.

Industrial properties have special considerations as well, most importantly how easily the physical structure can be adapted to new uses. Tenants whose businesses require special purpose buildings will add to the investor’s cost, if the property is leased to another tenant. A new tenant will not pay extra for building features they deem unnecessary.

Finally, medical properties also demand special attention to location. A preferred location would be on or near a hospital campus where an established practice of physicians is working in concert with the hospital. An ideal situation for the investor would be to have the hospital commit to a master lease and then sublet to the physicians.

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