COMMERCIAL INVESTMENT REAL ESTATE
6 July | August 2017
MARKET
T R E N D S
2016 Net-Lease Volume
Breakdown by Property Type
Where Transitional Lending
Fits into CRE Lending Market*
Grocers Beware:
Disruption Is on
the Horizon
Millennials Moving
the Needle on Retail
"Shoppers in the coming years will think
nothing of using voice-activated devices
like Amazon's Echo to restock their kitch-
ens. They'll habitually cook meals with
ingredients delivered by the likes of Blue
Apron, or drive to kiosks outside of their
neighborhood store to pick up groceries
after work.
We're already seeing this
kind of channel fragmentation and
disintermediation across the indus-
try, and it will only accelerate."
—Joe McKeska, president of Elkhorn
Real Estate Partners
HIGHER
RISK
LOWER
L+100–250BPS L+350–550BPS 8–12% YIELD 15–20% YIELD
TRADITIONAL
TRANSITIONAL
MEZZANINE
EQUITY LIKE
Source: Real Capital Analytics, Q1 2017
* Ranges are unleveraged estimates based on Q4 2016 markets. L+ indicates LIBOR+.
Source: Amherst Capital Management
Source: Cushman & Wakefi eld
• Millennials make 54% of their pur-
chases online, up from 51% in 2015
and 5% higher than online purchases
by other generations.
• Millennials don't view the world
through channels. Smartphones, tab-
lets, social media, stores, and every-
thing else are all one big ecosystem.
• To survive, retailers must integrate
their thinking, systems, and ways of
doing business.
• Digital natives are either a force to
contend with — or to succeed with.
Net-Lease
Retail Volume:
27%
Net-Lease
Industrial Volume:
33%
Net-Lease
Office Volume:
40%
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