Case Study: SIG Agents Tackle Challenging Net Lease Negotiations

SIG agents tackle challenging net lease negotiations with creative marketing tactics to justify replacement value and score big for the client

Working with the right net lease agency is vital when it comes to securing challenging net lease negotiations. An understanding and knowledgeable net lease agency can secure deals that other more general real estate agencies fumble. SIG is a commercial real estate brokerage firm that tackles challenging net lease purchases and sales.

Sands Investment Group Net Lease Negotiations Win

5.75% Closing Cap
Private New Loan
$8,000,000

Jan 31, 2018 – 5370 Douglas Boulevard, Granite Bay, CA

Working with a SIG broker is the best way to maximize your profits when selling and negotiating commercial net leases. Chris Naylon, along with Max Freedman and Elan Sieder, prove the power of specificity with the Little Sunshine Granite Bay transaction for client Stephen Brown.

Client Challenges

Listing had a high price per square footage
Appraiser couldn’t find comparable values (comps)
Hard to justify replacement value without the tenant
Specific build out

SIG Strategies

Bring awareness of the available property to buyers via creative marketing
Emphasize location of lease
Detail value aspects of the specific build-out features included in lease
Develop comps and market information to support pricing with the bank
Engage with multiple buyers to bring client multiple offers

Client Results

Found buyer at a 5.75% CAP within 60 days of marketing
Generated multiple buyer offers sub 6% CAP
New Loan: Long Term Absolute NNN 15 Year Lease with Two, Ten Year Renewal Options
10% Rent Increases Every 5 Years
$8,000,000 Win

Client had a commercial real estate property previously inhabited by a tenant who had the development custom built to suit his needs. It was hard to justify the replacement value without the tenant because of the precise build-out choices. The listing had a high price per square footage and the appraiser couldn’t find comparable values (comps) to promote the legitimacy of the listing’s cost. Client was seeking long-term NNN lease.

SIG emphasized the location of the lease in Northern California, just outside of Sacramento. The site is near multi-million dollar homes and several trade areas including the Quarry Ponds Shopping Plaza (adjacent), Roseville Auto Mall (3 miles), Roseville Galleria (5 miles). The location was perfect for a business with a customer base residing in Granite Bay, Rocklin, and Roseville. Granite Bay suburb is highly affluent with the average annual household income at $150,000.

Creative marketing strategies began by identifying the best commercial possibilities for the property and marketing to those businesses. Using SIG’s proprietary database made it possible to contact the right investors and brokers to generate interest in the property. SIG proprietary technology also made it possible to identify the best market for the property through in-depth market research and immediately list in those markets. Real-time information played a role in finding buyers and negotiating offers.

SIG brought multiple buyer offers sub 6% CAP to the client. SIG negotiated a brand new build-to-suit preschool facility for Little Sunshine Preschool on a long-term absolute NNN 15 year lease with two, 10-year renewal options for an $8,000,000 win. Corporate and personal guarantee from the owners and a 10% rent increase every 5 years was also attached to the contract.

Throughout the entire process, SIG re-evaluated the client’s property and developed new strategic recommendations. Property evaluations, portfolio analysis, and real-time market research through SIG’s proprietary technology all led to an innovative client-specific marketing plan.

Why SIG

Over $3,100,000,000 in Closed Transactions
Over $500,000,000 in Active Inventory
Over 1,300 Transactions in 48 States
Focused on Creative Marketing
Net Lease Industry Leader

SIG Awards

SC25 Fastest Growing Companies
Real Estate Forum Names SIG to Its List of Commercial Real Estate’s Fastest-Growing Companies, 2016 & 2015
CoStar Power Broker Top Firm Awards, 2017 & 2016