Commentary by David Sobelman, founder of 3 Properties & expert in all things net lease. David has closed over a billion dollars in his lengthy career & is a certified nerd.
Net lease brokers get a bad rap; mostly justified and always humorous. When I started as an analyst and subsequently as a broker 15 years ago, there were very few of us who focused on this once-unknown industry of triple net lease properties. Today, there are thousands of people who make their living in an industry that barely existed two decades ago. Therefore, it may be interesting to help someone new to the industry navigate the language that has evolved as more brokers are trying to sell their “goods and wares.” Below is a cursory list of some of the words and phrases, with their respective definitions, that have become common vernacular in the net lease market.
- Trophy Asset – A commercial real estate property that has been hyped by the broker to their client in order to attain the listing and/or sale.
- New Pricing – A softer way to tell the market that the broker got the pricing wrong and the client doesn’t want the “blood in the water” wording of “reduced” used in the marketing materials.
- Off-Market – A chance for a broker to try and make a sale without having the credibility with the owner needed to secure a signed listing agreement.
- Just Sold – Usually announced within minutes of a closing in order to tell others that the broker is super cool and you should bring more listings to them.
- New Listing – This phrase is used because you may not have yet seen the asset listed on the various listing services that you’re able to easily search; it will be posted there within 3-5 days anyway.
- Hot/Booming Market – Interchangeable descriptors used to make one think that investing in the bad area in which the property is located will one day yield profits and emotions that rival the euphoria of winning the lottery, due to the investor’s foresight. This usually never happens.
I am sure that there are dozens of other words or phrases that can be similarly defined and added to this list.