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Friday, April 28, 2017
Operating Race Track for Sale
Wednesday, April 5, 2017
First Choice ER Bankruptcy and Net Lease Investments
First Choice ER Bankruptcy and Net Lease Investments
2014: Adeptus, holding Company for First Choice ER, Goes Public: -Dallas Business Journal Link-
- CRE Buyers line up to purchase single-tenant, net-leased buildings leased to First Choice ER because the tenant is “publicly traded”.
· 2015-16
- My research always left me scratching my head.
- Base rental rates were $50-$60/sf +NNN; which was often double the local market base rent.
- I was told by zealous sales agents that I wasn’t factoring in the strength of a publicly traded tenant.
- I posed the question of what would happen IF the tenant filed bankruptcy, or went out of business since the base rent was SO much higher than market.
- I was constantly told that ERs weren’t going away…
- They were ridiculously profitable,
- The $60/sf base rent included LARGE, specialized tenant improvement (TI) funds paid by Landlord, that were amortized back into payments as rent.
- Typically, the Developer rolled the TI payments into the base rent, and then sold the Property to a single-tenant, net-leased Investor, who paid a price based on a cap rate reversion whose foundation was the inflated Net Operating Income (NOI).
- I sensed problems on horizon…
- 2017:
- Adeptus prepares to file for bankruptcy. -newslink-
- Adeptus publicly traded stock has gone from $122 per share to $.90 per share.
- You read that right.
- Medical Properties Trust seeks to acquire Adeptus assets/leases in bankruptcy.
- Update: Medical Properties Trust Agrees to Bankruptcy Restructuring of Adeptus Health, Adeptus Cuts Losses
- Leases are being assumed, restructured, and some sites are going have lease payments revised to a 9.2% cap rate.
- For those Investors who bought at sub-5% cap rates---trouble looms.
ACTION ITEM:
Make Sure you evaluate your acquisitions to see if they make sense in light of market, or sub-market rents.
About Jim Young, CCIM
Army Veteran, and graduate of the United States Military Academy at West Point. My career has spanned the last 19 years operating companies & partnerships focused on real estate & finance. After serving as a tank officer, I moved to Austin. Recent assignments have included Buyer Representation of apartment complexes, and multifamily development sites near downtown Austin's East Riverside Drive area. I currently serve as the 2017 Central Texas Chapter President, Certified Commercial Investment Members (CCIM).
In brokerage, I have focused on acquisition and disposition assets such as retail centers, multifamily, and land development sites for both. I have represented International and local Investors, as well as Business Owners on sale-leaseback transactions, and build to suits. Since 2010, provided representation on over $192M of CRE transactions. I have national credit tenant experience with: Starbucks, Einstein's Bagel, Verizon, AT&T Wireless, and more. Additional areas of expertise include: Multi-Family (apartment) acquisition & disposition; and land for multifamily, mixed-use and retail development. Prior to commercial brokerage, I was Founding Partner in a real estate investment company which placed in the Top 25 of Austin Business' Journal from 2003-2007, and successfully ran a private fund which provided high yield construction funding to solar power installers, secured by energy rebates, and tax credits as collateral on apartment projects. As a Principal, I have participated in the development, construction and sale of over 100+ projects that I was a Partner, or personally guaranteed the Debt. I have recently competed projects such as purchasing a bank building from the FDIC, and other retail sites.
Jim Young, CCIM & Broker
512-565-7509
@jimyoungcre
Tuesday, April 4, 2017
East Riverside Update: by Jim Young, CCIM
Follow Jim: Twitter: @jimyoungcre LinkedIn-Link 512-565-7509
#eastriversidedrive
What’s happening this week on East Riverside Drive?
Details are hitting the brokerage world about 6400 East Riverside Drive. You may recall, last year, I represented the Seller of 6400 East Riverside Drive which sold to a local (Newslink here) A flyer began circulating with details of the upcoming project, the aerial below, and other info: --Link Here-
About Jim Young, CCIM
Army Veteran, and graduate of the United States Military Academy at West Point. My career has spanned the last 19 years operating companies & partnerships focused on real estate & finance. After serving as a tank officer, I moved to Austin. Recent assignments have included Buyer Representation of apartment complexes, and multifamily development sites near downtown Austin's East Riverside Drive area. I currently serve as the 2017 Central Texas Chapter President, Certified Commercial Investment Members (CCIM).
In brokerage, I have focused on acquisition and disposition assets such as retail centers, multifamily, and land development sites for both. I have represented International and local Investors, as well as Business Owners on sale-leaseback transactions, and build to suits. Since 2010, provided representation on over $192M of CRE transactions. I have national credit tenant experience with: Starbucks, Einstein's Bagel, Verizon, AT&T Wireless, and more. Additional areas of expertise include: Multi-Family (apartment) acquisition & disposition; and land for multifamily, mixed-use and retail development. Prior to commercial brokerage, I was Founding Partner in a real estate investment company which placed in the Top 25 of Austin Business' Journal from 2003-2007, and successfully ran a private fund which provided high yield construction funding to solar power installers, secured by energy rebates, and tax credits as collateral on apartment projects. As a Principal, I have participated in the development, construction and sale of over 100+ projects that I was a Partner, or personally guaranteed the Debt. I have recently competed projects such as purchasing a bank building from the FDIC, and other retail sites.
Jim Young, CCIM, Broker
Sabot Development, Ltd
512-565-7509
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