RE #172: Vince Knipp - Senior MD Investments at Marcus Millichap - Single Tenant NNN Retail Assets 101
The Fort
What's Your Favorite Deal?
Real estate is a great investment if you know what you're doing. My favourite deal, um, is it the seven 11? Yes, tat's one of em probably. It was easy. They were paying in 11 dollars a foot in rent. And oe, they'll pay 60, 70 bucks a foot some day. So those are the types of deals i like.
Vincent Knipp is a Senior Managing Director of Investments in Marcus & Millichap’s Dallas office, where he specializes in net lease investment sales across the United States. Knipp has been the #1 Net Lease Agent in Texas and consistently ranks in the Top 10 Nationally within Marcus & Millichap’s National Retail Group. Over the course of his career, he has closed more than 350 transactions totaling nearly $1 billion in volume in 29 states.
On this episode, Chris and Vince discuss the market for single-tenant NNN assets, 1031's, what makes a good investment in this asset class, what makes a great broker, and a lot more. Enjoy!
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(02:14) - Vince’s Upbringing and Early Career
(05:11) - What were your first years as a broker like?
(07:06) - What’s the mythical ‘database’ that all Marcus agents build?
(08:20) - What did Marcus teach you about making your first calls as a broker?
(10:19) - What makes great retail?
(12:47) - Why do you put all the multi-tenant buildings with your partner?
(15:33) - Who are the typical sellers you work with?
(19:56) - Who are the typical buyers you work with?
(21:32) - How do you value a property in a major metro vs. a smaller town?
(24:14) - In markets where rents are growing quickly, are there a lot of buyers who will buy on a 2 cap and wait it out?
(27:01) - Ground Leases vs. Fee Simple Deals
(29:04) - What usually happens when a tenant leaves their building?
(30:33) - Are all of these leases pretty much the same?
(32:51) - Percentage Rent Clauses
(33:54) - Rent-to-Sales Ratios
(36:44) - Why do people leave?
(38:02) - What other factors are there in leases that are desirable?
(39:54) - Why do sales go down and is it usually tenant-specific?
(41:33) - How much do you pay attention to the specific products your tenants sell?
(42:29) - Are there ever demands from tenants that they’ll only sign unless you agree to not sell the building?
(43:40) - How much does access matter to you, tenants and customers?
(43:35) - All-for-One, One-for-All Scenarios of Tenants
(46:26) - What are tenants requesting now that we’ve been through Covid?
(48:39) - Has the upsurge in drive-through changed things permanently?
(51:52) - Are cosmetic upgrades usually on the operator and not the landlord?
(53:24) - What do you tell people in a transaction that costs 2x more than replacement costs?
(54:40) - Are there any up-and-coming tenants you have your eye on?
(56:05) - How do you conduct due diligence without ever seeing the property in person?
(57:48) - Do ghost kitchens make you nervous?
(58:51) - What’s your favorite deal you’ve ever done?
(1:01:51) - Will you do deals anywhere or are you only based in Texas?
(1:02:32) - Is there a reason you’ve stayed with Marcus for so long?
(1:04:17) - Is there a way to share information across all of Marcus’ agents?
(1:05:45) - Is there anything in the industry that still really excites you after being in it for 15 years?
(1:07:20) - Underwriting Deals with a Franchisee vs. a Franchiser
(1:09:16) - What can go wrong once you’re under contract?
(1:11:34) - How much volume are you expecting for the rest of 2021?
(1:13:20) - How do you sell a ‘party center’ deal?
(1:15:31) - What advice would you give to people getting into the industry today?
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