Net Lease News

B+E Weekly Newsletter

December 19 – December 25, 2023

MARKET

WHERE WILL NET LEASE GO IN 2024? | Globe St.

• In 2023, higher debt costs, a looming $2 trillion-plus wave of corporate debt coming due, and other economic uncertainties have clouded the CRE outlook.
• The sudden shift in rates has caused a break in investor expectations with one-off syndicators or family offices still pursuing compressed numbers. Meanwhile, institutional investors are focusing on tenant credits and cap rates at 8% and higher.
• For companies looking to raise capital, there’s an opportunity in sale-leasebacks.

INDUSTRIAL

INDUSTRIAL’S SUPPLY-DEMAND SHOULD BALANCE BY END OF 2024 | Globe St.

• New supply tallies have set all-time highs of 450 million square feet through the first three quarters of 2023, up 33% year-over-year.
• However, headwinds such as rising interest rates, vacancy concerns, and normalizing demand led to a big drop off in starts this year. The pullback on speculative development will help ease vacancy concerns and return the market to a supply-demand equilibrium.
• It’s the first time the pipeline has contracted since mid-2020 with industrial space under construction down by 26% on average year-over-year in the 25 largest markets.
• While circumstances have pushed vacancy rates higher in nearly all markets, the outlook for industrial remains favorable as e-commerce and reshoring continue to grow.

WHAT’S DRIVING THE MANUFACTURING REVIVAL? | Commercial Search

• Between January 2021 and October 2023, more than 845,000 new manufacturing jobs were announced, which was more than double the figure from the preceding three years. Just eight states in the Midwest and Sun Belt created nearly half (47%) of new manufacturing jobs: Arizona, Georgia, Michigan, North Carolina, Tennessee, Ohio, South Carolina and Texas.
• This revival is propelled by a significant injection of public incentives, including federal allocations from the Inflation Reduction Act, the CHIPS and Science Act, and the Bipartisan Infrastructure Law, which supported $628 billion in capital investments in manufacturing since the start of 2021.

RETAIL

SHAQ’S BIG CHICKEN HAS BIG PLANS FOR LOUISIANA GROWTH | QSR Magazine

• Big Chicken, the star-powered fast casual chicken concept founded by legendary basketball Hall of Famer and former LSU basketball star Shaquille O’Neal, announced that the brand will expand its presence in Louisiana in a big way.
• Big Chicken will serve several markets across the state, with Lake Charles being one of the first locations on their list for development. The owners are currently narrowing down the site selection process for their inaugural restaurant, with plans to expand further with additional locations in the Lafayette area.
• Ideal franchisees are multi-unit operators who trust and understand the established system Big Chicken has in place and have the capital to open several units. With significant interest from new owners, franchise investors will have the advantage of joining a brand on the cusp of worldwide expansion.