Net Lease News

B+E Weekly Newsletter

April 9 – April 15, 2024

MARKET

First-quarter CMBS issuance was the highest since the second quarter of 2022 when $20.6B in deals were priced. It was up 39% from the fourth quarter, with nearly $18B of CMBS debt issued spread across 23 conduit and single-borrower transactions.

More than 13% of the Q1 total came from one deal, the refinancing of a 186-property, 16.6M SF industrial portfolio acquired by Blackstone Real Estate Partners in 2019.

Blackstone-owned properties dominated the first quarter of CMBS lending, with five $1B-plus deals priced.

Spreads also tightened in Q1, reflecting investors’ desire for lower risk, shrinking from 145 basis points more than 10-year Treasury yields to just over 90 basis points in the latest CMBS conduit deals this year.

INDUSTRIAL

The online retailer is planning to use its same-day fulfillment centers for the delivery of perishable groceries and pharmacy goods.

The company has 58 of these same-day delivery sites in the largest metropolitan areas in the U.S.

Earlier this year, Amazon announced that it would open smaller Whole Foods stores, ranging from 7K SF to 14K SF.

NorthBridge Partners and Park Madison Partners have closed NB Partners Fund IV, which raised $950M targeting small to midsized infill logistics properties.

The fund is looking for properties in densely populated places, active ports or markets with manufacturing that stand to benefit from reshoring, a trend that has spiked in recent years.

The combination of strong secular tailwinds for infill industrial real estate set against a backdrop of dislocated capital markets makes for a particularly favorable investment environment.

RETAIL

The chain plans to close an additional 53 stores in nine states on top of the roughly 200 stores it has already closed.

The new closures will occur in California, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and Virginia.

As the drugstore retail landscape has transformed with e-commerce giants like Amazon and Walmart entering the space, it has created problems with brick-and-mortar locations struggling to stay alive.

Few chains in fast food are expanding as consistently as the 1984-founded chain, which remains family-owned and operated alongside an investment from Inspire Brands, Subway, and GoTo Foods’ backer Roark Capital, which provided Culver’s its first capital infusion in 2017 as a minority stakeholder.

Culver’s lifted by a net of 52 locations in 2023, per the FDD. It’s positioned to approach 1,000 in 2024 as it exited with 944 (937 of which were franchised). Culver’s, as mentioned, opened 50 stores in 2019 and 2020, respectively, and followed with 55 net openings apiece in 2021 and 2022, meaning the company has added 262 locations since 2019.

It’s projected to expand by 51 this year, with 60 franchise agreements signed and outlets still waiting to be opened. If that happens, Culver’s will cross into 2025 with 995 restaurants.