NetLeaseGuy

Need to have a robust model in place to save time when analyzing deals. Lately, I’ve seen a few deals that looked great at first glance, but once I ran the numbers, they just didn’t pencil — either returns were solid in the base case but got crushed in the downside, or there just wasn’t enough juice in the base case because of weak rental growth, double-net lease structure, or something else that made it nearly impossible to hit mid-teens IRR without getting overly aggressive on the exit cap rate. I like deals with great risk-adjusted returns — something in the low-to-mid teens IRR on the base case, even if you have slightly less confidence in the base case playing out, but still mid-single digit returns on a realistic downside. The beauty of some net lease deals is that if you buy the real estate at the right price in a good market, your downside could actually turn into a bigger upside. In this deal I’m working on now, in-place rents are well below market — so even if the tenant vacates, there’s a real path to much stronger returns just by re-leasing at today’s rents. That’s where I like to play. #CRE #NetLease #NetLeaseGuy #PERE #RealEstateInvesting #NNN

?? What’s in the Lease? What’s Missing? One thing that always surprises me when reviewing leases—how few actually require meaningful financial reporting from tenants. Sure, most leases include some kind of generic tenant-level reporting requirement. But unit-level financials? Those are rare—and that’s a problem. Why does this matter? Let’s break it down: ? Valuation Impact: When it comes time to sell, buyers (especially institutional groups) want clear visibility into performance—at the store level. Without that data, the pool of buyers shrinks, and cap rates expand. In other words, missing financial reporting can cost you real money when you exit. ? Leverage at Renewal: When lease renewals roll around, the landlord is flying blind without good unit-level financials. You’re negotiating rent bumps and term extensions with no hard data to back up performance claims. This weakens the landlord’s position and gives the tenant the upper hand. ? Credit Story Clarity: A national tenant’s corporate financials only tell part of the story. A profitable national chain can still have underperforming stores—and those underperformers are exactly the sites tenants might look to shed or renegotiate. If you own one of those stores, you want to know before the lease clock starts ticking. So why don’t more developers or landlords push for these requirements upfront? Often, they’re focused on lease-up speed. They want deals signed and done—and including reporting requirements can be seen as a friction point. But that short-term mindset can hurt long-term value in a big way. Sophisticated institutional investors often insist on financial reporting clauses. If they’re not in the lease, some groups won’t even bid. It’s that important. #triplenet #netlease #netleaseguy #realestateinvesting #pere #REIT

Direct outreach can be a powerful tool for GPs looking to lease space or sell assets — but let’s not forget why brokers exist and why they bring so much value to the table. It’s easy to look at a leasing or sales commission and think, “I could save that fee if I just found the tenant or buyer myself.” And sometimes, you might. But more often than not, brokers earn every dollar they charge. Here’s why: ?? Relationships that can’t be replicated overnight. A seasoned broker has spent years — sometimes decades — building relationships with national tenants, institutional buyers, 1031 exchange investors, and local market players. They know who’s expanding, who’s actively looking, and who’s quietly searching for off-market deals. ?? Market intel that’s hard to gather from the outside. A good broker has a real-time pulse on rents, cap rates, concessions, and competing properties. That’s insight you can’t always get from CoStar or a quick LoopNet search. ? Speed matters in today’s market. If a broker finds a buyer in the first week, it’s tempting to think, “I could’ve done that myself.” But what you’re really seeing is the result of years of groundwork—prior deals, long-term relationships, and consistent follow-up. That speed doesn’t happen in a vacuum. Now, does this mean GPs shouldn’t ever do direct outreach? Not at all. There’s value in running a dual path — leveraging your own network while also having a strong broker pushing the deal. Sometimes, your own contact list might surface an unexpected opportunity, or your outreach could help build momentum. But at the end of the day, your job as a GP is clear: ? Maximize proceeds ? Within a timeframe that fits your business plan Whether you achieve that through direct outreach, broker relationships, or both — the process matters less than the outcome. #NetLeaseGuy #CommercialRealEstate #NetLease #RetailRealEstate #Leasing #PERE

?? Reminder: Multifamily isn’t the only game in town. If you’re after passive income, it’s time to take a closer look at Net Lease investing. With the right deals — solid tenants, strong leases, and smart pricing — you can target 15%+ returns, similar to multifamily, but with way less hassle: ? No tenant headaches or midnight maintenance calls ? Tenants cover taxes, insurance & maintenance (in triple-net deals) ? Diversify into retail, medical, industrial, and more Even in today’s challenging environment, some of the best risk-adjusted returns are hiding in the net lease space — if you know where to look. Follow #NetLeaseGuy for insights, deal breakdowns & straight talk on making net lease work for you. #NetLeaseGuy #PassiveIncome #NetLease #NNN #RealEstate #CommercialRealEstate

So you’re in a department of 10 people with a lot of layers. Big boss at the top, then Head of Department, 4 VPs, 2 Directors, and 3 Associates. If there’s 50%+ turnover — layoffs, resignations — including the Head and most VPs, there’s a leadership issue at the top. The buck stops at the top, but there’s always collateral damage before that’s realized. ....hypothetical example of course #netleaseguy #netlease #corporateculture #REIT #NNN #pere #commercialrealestate

We've analyzed a LOT of deals lately, and very few pencil out. The ones that do often come with major red flags—whether it's overpriced rents, weak tenant credit, or real estate that just doesn't hold up. At times, it feels like we’re chasing a unicorn. That said, I am noticing the bid/ask spread is slowly tightening as sellers adjust to this new reality. But real estate moves slowly, and with so much private capital sitting on the sidelines, all-cash buyers are making it tough to compete. Patience is key. It’s better to keep turning over every rock than to sacrifice investment discipline just to get a deal done. Better opportunities will come. #netleaseguy #netlease #triplenet #NNN #REITs #pere

Trust, But Verify: The Underwriting Reality Underwriting deals isn’t just a desktop exercise—it’s a battlefield of incomplete information, competing agendas, and carefully crafted narratives. Great brokers can be invaluable allies, but at the end of the day, their goal is to get the deal done. Tenants will always present their financials in the best possible light. Even when you ask all the right questions and get seemingly solid answers, the real question is: Can you verify them? I’ve learned the hard way that talk is cheap. What really matters are actions and fact patterns. Experience teaches you that underwriting isn’t just about plugging numbers into a model—it’s about stress-testing the story behind the deal. The best underwriters don’t just trust what they’re told; they verify, cross-check, and look for inconsistencies. #NetLeaseGuy #NetLease #TripleNet #PERE #RealEstateInvesting

Realty Income's Growth Playbook is Running Out of Moves The bottom line for Q4 earnings…2025 AFFO guidance came in soft at just 1.4%, missing expectations. ? Acquisition guidance for 2025 sits at $4.0B, almost identical to 2024. But when you pair weak earnings guidance with board approval for share buybacks, the message is clear: investment spreads just aren’t there. Cost of debt and equity is too high. ? O’s investor deck claims a first-year WACC of 5.4%, but the methodology has shifted. Using their historical framework—60% equity at 8.0%, 32% debt at 5.2%, and 8% retained FCF at 0%—the real WACC is closer to 6.5%. That means spreads on new investments are under 100bps. ? Now, let’s do the math: $4B in acquisitions at a 100bps spread = $40M in profit, or roughly 1.1% AFFO growth. Layer in ~1% same-store rent bumps, but offset that with higher debt refinancing costs and growing bad debt risks (Zip’s Car Wash, JOANN, Red Lobster, Rite Aid, and others), and it’s easy to see why earnings growth is sluggish. ? Then there's the Q4 7-Eleven deal—185 sites likely done at a ~6.25% cap for $500M-$750M. Realty Income’s cost of capital is higher, so while it may pencil out long-term, it underscores the challenge: as the asset base grows, it gets harder and harder to move the needle on earnings especially if 1st year investment spreads are likely negative. ? That’s why they’re trying everything—gaming, private funds, Plenti, high-yield debt, etc. Is this an identity crisis? Or too much financial engineering? ?Here’s the real question: Has Realty Income reached a point where they’re simply too big? ? One thing seems certain—the premium AFFO multiple that Realty Income once commanded is gone. That baton has clearly been passed to Agree Realty. Investors (or at least me) now view O more as a conglomerate and bond alternative—which isn’t necessarily bad, but it explains the valuation discount. ? The real risk? A “death spiral” where the cost of equity (which makes up ~60% of capital) stays higher than cap rates in a business model where earnings growth is mainly driven by transaction volume, making it increasingly difficult to grow earnings. This is basically what happened to VEREIT and Spirit Realty, ironically both acquired by Realty Income over the past couple of years. ? What do you think? Drop your thoughts below. ?? ? #NetLeaseGuy #RealtyIncome #TripleNet #SaleLeaseback #REITs #NetLease #AgreeRealty #ADC

If You Don’t Love to Hunt, You’re in the Wrong Business Net lease is all about the hunt. Whether you’re an investor, operator, or broker, your success depends on your ability to uncover great deals—whether brokered or direct. ?? For Investors: The value-add isn’t just in the real estate—it’s in your ability to sift through hundreds of deals and quickly filter out the ones that don’t work. If you’re not constantly hunting, you’re already behind. ?? For Asset Managers: When a property goes vacant, it’s on you and your team to secure a replacement tenant. DIY leasing can be a great value-add, but understand that it’s a full-time job. Partnering with the right brokers can help you move faster, especially when time is money. Brokers exist for a reason. ?? For Brokers: This business is all about the game—the thrill of matching the right buyer or tenant to the right deal. But with the highs come the lows: Losing a tenant because they didn’t follow up. Watching a stubborn client refuse a deal—only to realize six months later they should have taken it. This business takes mental fortitude. The highs are incredible, the lows can be brutal. But if you love the hunt, the game, and the thrill of the win, then you’re in the right place. #netlease #netleaseguy #realestateinvesting #pere #triplenet #nnn

The Art of Structuring Sale-Leasebacks in Net Lease Deals There are a lot of creative ways to make a sale-leaseback deal pencil, and that’s what makes them fun in the net lease space—because structure is everything. Most of the time (not always, but most), the operator’s main concern is maximizing proceeds—within reason. Let’s break it down with an example: ?? Industrial sale-leaseback priced at a 6.5% cap with a $2M price tag ?? Current rent: $130K annually (25K SF at $5.20/SF) At first glance, this might seem like a tight deal and doesn't work for you. But if you know how the game is played… ?? What if you bumped rents to $7/SF instead of $5.20? ?? That raises total rent to $175K annually ?? At an 8.00% cap rate, total proceeds jump to $2,187,500 Now, instead of offering $2M like everyone else, your offer is nearly $200K over ask—a clear way to stand out. If the market can somewhat support higher rents and the company (or PE sponsor) is motivated, this becomes a win-win solution—and a way to immediately create value. Here’s the kicker: If you acquire this asset at an 8% cap but the “market” is really at a 6.5% cap, and the only difference is adjusting rents from slightly below market ($5.20/SF) to slightly above ($7.00/SF), then the exit cap rate likely won’t be impacted much and you created a nice spread and immediate value. ?? Would you be comfortable pushing rents in a sale-leaseback to make your offer stand out? Drop your thoughts below. #netleaseguy #saleleaseback #REITs #pere #netlease #triplenet