Top Takeaways: GlobeSt. Net Lease Spring 2021

Top Takeaways: GlobeSt. Net Lease Spring 2021

June 17, 2021

Slatt Capital was represented by President Michael Kaplan and Senior Analyst Marina Elias at the GlobeSt. Net Lease Spring 2021 Conference in New York City. The following were their top takeaways from the two-day annual event, of which Slatt Capital was a sponsor.

  • The pandemic’s impact is not equal, from a geographical standpoint. Middle America vs. Coastal America, Rust Belt vs. Sun Belt all managed the pandemic differently.
  • The retail market is not dead. While the struggles of malls, B- and C-quality retail centers, and secondary and tertiary markets have been in the spotlight, they do not represent the full story. Pet stores, convenience stores (c-store), and quick service restaurants (QSR) have been crushing it. Additionally, certain retailers, like Kohl’s, have emerged from the pandemic better positioned and more profitable than prior to the nationwide shutdown.
  • The office market is shifting, not dead. The 25–30-year-old demographic makes up a huge percentage of the workforce. Although tech-savvy, they still require training, and that is most effective in an office setting. Expect per capita PSF to expand (whereas, pre-pandemic, it was tightening).
  • Legislation will be front and center for the next 12 months. Eliminating the 1031 exchange is unlikely, but we could see modifications or limits put in place. Revisions to capital gains might be on the table, and that would potentially drive up 1031 volume. Overall impacts would be greatest in small to middle markets and less in the large owner/REIT space. Interest rates, inflation, and cap gains reform are bigger variables to focus on.
  • Look for 2021 merger & acquisition activity to continue, as capital and liquidity are plentiful. This trend will drive sale-leaseback activity.
  • Rates are expected to remain low for the foreseeable future, both domestically and internationally.
  • A competitive environment will remain, due to the availability of liquidity and easy access to capital across equity and debt platforms.

Michael Kaplan

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