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Page 2 – Horn Capital Realty Relocates to Miami Area
Dallas Business Journal and by the Dow Jones News Wire. The former Vice President of the Retail Division at Henry S. Miller Commercial -- Texas’ largest independent real estate services firm -- started his own company in 1996.
“Business Week has called triple-net lease real estate ‘a smart idea…for risk-averse investors seeking a steady source of income.’ High net worth individuals, particularly conservative investors, as well as banks, trusts, pension funds and REITs are probably the best candidates for these types of investments, “ he explained. “They share homogeneous objectives: safe, passive real estate investments designed to provide predictable, advantageous annual cash income, tax reduction benefits and the opportunity for significant long-term gain.
“National Real Estate Investor has reported, ‘The sale-leaseback industry has restructured the ownership of trillions of dollars worth of the nation’s corporate real estate assets’,” said Horn said.
In a sale-leaseback arrangement, a company sells one or more of its single tenant properties to an investor, generally for fair market value, in order to convert its illiquid real estate assets into working capital, he noted. The investor provides the seller with a triple-net lease for a negotiated period of 10 to 25 years. The seller/tenant then pays the investor a negotiated annual rent equal to 8% to 13% of the contracted sale price. Most often that rate is credit-driven.
A triple-net lease property frees the investor/landlord from any property responsibility. The tenant agrees to pay all costs associated with the property use and occupancy, including real estate taxes, insurance, improvements, on-site property management, maintenance and improvements.
Sale-leaseback transactions generally require a long-term investment of $1 million to $200 million or more. Such investments are available for all types of existing or build-to-suit real estate, including service centers, fast food establishments, industrial and health care facilities, office and educational buildings, distribution warehouses and retail stores. Horn Capital Realty, known as one of the most experienced, efficient and cost-effective facilitators, is currently working with several large U.S. firms seeking financing for their properties.