Taro Chellaram, CCIM’s Post

Adapting to the New Norm: The Changing Landscape of Net Lease Investments 💼💰 Despite challenges in capital access and rising interest rates, the net lease sector persists. Dive into the trends reshaping the market in 2024. #NetLease #InvestmentTrends #RealEstateInsights Follow the link to read more: https://lnkd.in/d-ZesfXY

The net lease sector is anticipating more velocity ahead for 2024. Read WealthManagement.com's Net Lease Report featuring comments from WPC’s Jason Patterson to learn more about the outlook for the sector. https://bit.ly/4cYIzd5

Triple Net Lease investments give you the opportunity to create wealth in a shorter amount of time than other investments. They also provide the ability to live ANYWHERE and eliminate the stress of actively managing commercial properties. Doesn't that sound nice? 😊 Here's how to make that happen: https://lnkd.in/eK38Hexk #NNNLeaseInvesting #NNN #TripleNetLease #CRE

High interest rates and rising capital costs are reshaping the real estate investment landscape. In response, Redefine Properties is implementing a strategic capital optimisation plan to strengthen its balance sheet and enhance financial flexibility.     Anticipating a prolonged constrained capital environment, Redefine has developed a comprehensive approach to efficient capital sourcing and allocation. This strategy transforms the funding base, reducing concentration risk without deeply dilutive equity issuances. Capping exposure to any single counterparty at 15% and maintaining a flexible debt maturity profile mitigates liquidity risks while securing optimal pricing.      Proactive debt and liquidity management is a cornerstone of our broad funding strategy. Over the past three years, R35 billion of group debt has been refinanced and R4.4 billion in new debt has been raised, ensuring a stable liquidity profile is maintained, which is crucial in volatile markets.      Sustainability is integrated into Redefine's capital strategy. Leveraging its 2022 group-wide sustainable finance framework it has expanded green funding initiatives. With R15.6 billion (35.3%) of group debt now green, Redefine leads in real estate sustainable finance across the South African and Polish markets.      Strategic capital recycling further strengthens the financial position. R18.3 billion of capital has been recycled over the past five years through disposal of non-core assets, improving liquidity and steering the loan-to-value (LTV) ratio towards a 38% to 41% internally set medium-term target range.      Innovative funding approaches, including restructuring South African secured debt, are being explored to enhance the sustainability of our financial structure. This forward-thinking stance on capital optimisation demonstrates an impactful commitment to delivering consistent growth through long-term value creation while maintaining agility for future opportunities.      #RedefineProperties #SAReit #CapitalOptimisation #SustainableFinance #StrategicGrowth #RealEstateInvestment   

SAVE THE DATE! 🗓️ The next Connect & Invest virtual event will occur this March, discussing Triple Net Leases! Thursday, 3/21 at 2:00 PM EST. Please comment below for meeting information. We look forward to seeing you there! #virtualsummit #propertyinsurance #multifamilyinvesting

Good morning #linkedin friends! We’ve seen these sort of news lately. We call it SF. There’s also TF (transition financing). Allow me to share 1 problem and 1 solution. Problem: many are seeking #financing or refinancing of fixed assets. And this by turning it green. Eg, upgrading the #infrastructure of a building by upgrading its chillers, retrofitting the lights and installing #solar panels. These are aka #capital expenditure. And the payback tends to be longer compared to #investing in core #business operations such as building a new production line. As a result, many CFOs are still not at the table unless they’ve been nudged by someone higher up. And #shareholders prefer to #invest in #opportunities with shorter payback periods. Solution: #green investments, SF and TF can be moved into operating expenditure (opex). That would require a 3rd party to take over and own those assets while signing on a long term lease. It’s a win-win-win. The company upgrades its infrastructure and reduce its #carbon footprint, the 3rd party gets a long term contract with revenue certainties, and the bank gets to finance this arrangement too. Caveat: many ways to skin a cat. This is 1 way, and it’s not the only way, and may not be applicable across the board. Perhaps it’s time to upgrade our economic models as well…and change the short term expectations by shareholders. Wishing everyone an awesome week ahead!! #LBFalumni   #SkyHighTower

"Industrial net lease investing can provide durable, tax-efficient and growing yield. And since the tenant pays most of the bills – and the leases typically have contractual annual rent growth – this strategy can provide an attractive inflation hedge." President and Co-CIO of Bridge Net Lease Industrial, Matt Tucker. More of Matt's views in the first of our new five-part series on our industrial net lease strategy here: https://hubs.la/Q02NJjdw0

Nice post by Jonathan Nichols about swimming against the tide…🏊♀️🏊♀️🏊♀️ When floating rate interest only bridge debt was all the rage… As operators all across the US lost sight of the fundamental safety, security and value of fixed rate debt in pursuit of (illusory) cash flow and higher leverage, some operators made the contrary but ultimately the correct long term decision. At Spark, we made several acquisitions between Q4 2021 and Q3 2022 and obtained the following debt: Dec 2021 we got 3.8% fixed debt. 2.5 years left. No prepayment penalty. April 2022 we got 3.85% fixed debt. 8 years left. No prepayment penalty. Sept 2022 we got 5% fixed debt. 3 years left. No prepayment penalty. We gave up some cash flow at the time to get fixed rate debt but we continue to pay distributions unlike many of the floating rate deals where distributions have been paused and even worse capital calls are being made to fund rate cap buys. On the April 2022 deal, our lender required 20 year amortization. When was the last time - in a world where interest only is the holy grail - you heard of anyone getting 20 year amortization? Trust me the “cash flow is king” types lost their minds when I sent them that deal. 😀 We also put down 45% down to provide protective cash flow long term. The “swing for the fences” operators said not enough leverage. We didn’t listen to the “Greek Chorus” and thought for ourselves. My investors and I closed the deal and we are happy campers. Often (more often than naught?) going against conventional wisdom is the right call - one just needs belief and conviction in their investing principles and stick to them even when not popular with the “in crowd”. Congratulations to your team and you for thinking for yourself and doing something that went against conventional wisdom at the time. I imagine your deals are solid performers set for long term success. 👍

🌟 Demystifying Convertible Debt in Real Estate Investments 🏢 Convertible debt, a hybrid financial tool, offers a flexible and strategic pathway in real estate investment. It's a bridge between debt and equity, providing both security and potential for significant returns. Here's a simplified breakdown using a real-world example: 🔹 Scenario: A real estate project requires €1,000,000. Emma, an investor, covers €500,000 through convertible debt, attracted by its unique benefits. 🔹 Convertible Debt Advantages: Flexibility: Converts from debt to equity based on pre-agreed conditions. Investor Incentives: Features like interest rates and potential equity conversion offer a balanced risk-reward scenario. 🔹 Emma's Journey: Emma's €500,000 investment, at a 5% annual interest over 3 years, accrues €75,000 interest. Post-construction, the property's value spikes to €2,500,000. Emma opts to convert her debt to equity, gaining a 28.75% stake, now valued at €718,750. 🔹 Profit Insight: Emma's profit = Value of Equity Stake - (Initial Investment + Accrued Interest) Emma's profit = €718,750 - (€500,000 + €75,000) = €143,750 Convertible debt is not just about the numbers; it's about strategic foresight, aligning investor and project interests, and navigating the dynamic real estate landscape with innovation and adaptability. 🔑 #RealEstateInvestment #ConvertibleDebt #FinancialStrategy #InvestmentInsight #ProfitAnalysis #StrategicInvesting

Comparison between InvITs and REITs Discover the gateway to real estate and infrastructure investing with REITs and InvITs. Comparison between how these investment offers opportunities for beginners to access diverse assets, generate income, and navigate the market with ease. #investing #realestate #infrastructure #reits #InvITs #finance #beginnersguide #investmentopportunities #assetmanagement