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Colliers Starts Net Lease Specialty in South Florida

Freestanding Restaurants, Drugstores Offer Stable Returns, Brokerage Says
August 6, 2018

Colliers International South Florida has hired a veteran broker to launch a net-lease specialty, a mundane but booming niche in commercial real estate.

ARONSON
Doug Aronson has joined Colliers’ Boca Raton, FL office as a senior vice president.

In his new role, he will head the global commercial real estate services firm's division that focuses on the sale and purchase of net-leased properties – an industry class often comprising freestanding fast-food restaurants and drugstores with established national tenants.

In a triple-net lease, the tenant pays a base rent, plus the property owner’s building expenses including taxes, insurance and common-area maintenance. The landlord receives a net rent payment and is not responsible for those extra costs associated with commercial building ownership.

Aronson said the buildings are stable investments that don’t require much maintenance. Most of the properties are retail, but there also are net leased industrial and office buildings, he added.

"Investors like the fact that they are buying a piece of real estate that they can one day reposition but for the immediate future can simply collect a rent check with little or no landlord responsibilities," he explained.

The key factors for investors is finding properties on high-traffic street corners with credit-worthy national tenants locked into long-term leases, said Peter Reed of Commercial Florida Realty Services in Boca Raton, FL.

“There’s no hassle,” Reed said. “You just collect your coupon payment every month.”

More investors have sought the security of net-leased properties over the past decade following the Great Recession, Aronson said. Other brokerages have the specialty, including CBRE and Marcus & Millichap, but this is Colliers' first in South Florida.

In the first half of the year, triple-net property sales across South Florida totaled $266 million, up from $256 million during the same period of 2017, according to CoStar Market Analytics.

Story Continues Below
Includes sales over $1 million
Sources: Marcus & Millichap Research Services, CoStar Group Inc. and Real Capital Analytics.
Click infographic to enlarge.


Barry Wolfe, a senior managing director with Marcus & Millichap, said the net-lease sector represents a significant slice of commercial real estate, even though the individual property sales don’t garner much attention in the industry.

“Is it sexy? I don’t know,” Wolfe said. “Beauty is in the eye of the beholder.”

Ken Krasnow, executive managing director for Colliers International South Florida, said in a statement that the specialty allows the firm to meet the needs of a wider group of prospective clients.

Aronson joins Colliers from the Calkain Companies, a brokerage in Fort Lauderdale that focused on net-lease transactions, where he served as a managing director.

A former television news reporter with a bachelor's degree in journalism from Boston University, Aronson transitioned to commercial real estate in 2005. Throughout his career, Aronson has sold or leased nearly $500 million in investment properties over the past 13 years.



Paul Owers, South Florida Market Reporter  CoStar Group   
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