Jack Cuneo

By Gail Kalinoski, Contributing Editor

Less than a month after telling shareholders it was exploring ways to provide a “liquidity event,” Chambers Street Properties, a self-managed Maryland REIT, made it official Tuesday, announcing it intends to list its common shares on the New York Stock Exchange. The REIT said it expected to be trading on the NYSE under the ticker CSG on or by May 21.

The REIT, which has its headquarters in Princeton, N.J., also said it was planning a modified “Dutch Auction” tender offer to purchase as much as $125 million of its common shares. Chambers Street would select the lowest price within a range of $10.10 and $10.60. The tender offer will be paid for with funds from its unsecured revolving credit facility.

In an April 2 letter to stockholders, Chambers Street president & CEO Jack Cuneo said the firm had hired Wells Fargo Securities L.L.C. and Citigroup Global Markets Inc. as its financial advisors. He noted listing its shares on a national exchange was a possible outcome as it positioned itself for a “future liquidity event.”

The firm’s board of trustees deemed listing on the NYSE to be “in the best interest of the company and its shareholders,” according to a news release from Chambers Street Tuesday.

“Chambers Street believes that a listing will enable it to continue to execute its asset management, portfolio growth, and capital strategies designed to maximize shareholder value,” the release stated. “Publicly traded real estate companies have enjoyed strong returns in recent years, and companies that own net lease properties, similar to Chambers Street, are trading at attractive valuations. In addition, Chambers Street believes that a listing on the NYSE will provide access to additional potential investors as well as to a broader range of potential sources of capital.”

Because of the pending listing, Chambers Street officials could not comment beyond the firm’s news release.

The plan for public listing comes as the REIT has had a particularly active year since changing its name from CB Richard Ellis Realty Trust last June and moving to self-management. The REIT has about $3.2 billion in real estate holdings in the United States and abroad. It currently owns or has majority interests in 129 properties, mostly industrial and office assets, in 22 U.S. states, Germany and the United Kingdom. As of Dec. 31, 2012, the portfolio was 98 percent leased to 272 tenants, with diversity in locations, industries and lease expirations.

Two weeks ago, Chambers Street said Big O Development Inc., a major tenant at its Summit Distribution Center property in Salt Lake City, had signed a five-year lease renewal. An automotive tire distributor, Big O leases more than 100,000 feet of the 275,000-square-foot center, acquired in 2010 as part of a seven-property industrial portfolio.

Celebration Office Center, Orlando

Chambers Street has made four big acquisitions so far this year, including acquiring the remaining interests in 17 properties it owned in joint venture with Duke Realty Corp. The portfolio, which sold for a reported $98.6 million, comprised 16 office properties and one industrial asset, an 820,000-square-foot warehouse/distribution facility in Phoenix. The office properties included three buildings with a total of 542,000 square feet in Cincinnati and two buildings with a total of 451,000 square feet in Columbus. Other properties were located in Dallas; Fort Lauderdale; Houston; Minneapolis; Raleigh, N.C.; and two in Orlando  – Celebration Office Center and Northpoint III, with a total of 209,000 square feet.

In February, Chambers Street made its first acquisitions in the Philadelphia area, closing on two office buildings totaling 300,000 square feet in Malvern, Pa. The two buildings were developed by Chambers Street, then still known as CB Richard Ellis Realty Trust, and Trammell Crow, a CBRE Group subsidiary, in joint venture and leased to Endo Health Solutions.

Inland American REIT wants to sell its 143-branch SunTrust Net Lease Portfolio, and the real estate company has selected Jones Lang LaSalle’s Capital Markets Group to find a buyer for the group of assets, which is valued at more than $275 million.

The 715,000-square-foot collection of SunTrust Bank retail branches consists of eight sub-portfolios subject to eight master leases in strong banking markets throughout in the Mid-Atlantic and Southeastern U.S., with 40 percent of the portfolio located in Florida. While there are only five years remaining on the terms, an option structure commits SunTrust Bank to renew for an additional 10 years.

It’s a package that practically any investor would love in the current market. “It’s unusual to have something like this in the market today,” Randy Blankstein, president of The Boulder Group, told Commercial Property Executive. “It’s the sweet spot of what people are looking for–investment grade tenants, long-term leases–so I think it will be well received in the market because there’s a lot of pent-up equity.”

Inland has its reasons for letting go of the portfolio. “The disposition of these net lease retail assets corresponds to Inland American’s long-term portfolio strategy to move into additional multi-tenant, necessity-based retail properties,” Jeff Manno, vice president of transactions of Inland American, said in a prepared statement.

Inland’s timing appears to be just right. “In terms of the general net lease market, it is without a doubt a seller’s market at this point in time,” Winston Orzechowski, research director with Calkain Cos., told CPE. “What we’re looking at right now is there’s a huge amount of demand and that’s pressing cap rates very, very low and this is being triggered by a few different things. On the one hand, while we’re now beginning to see new development, we really hadn’t had much in the last few years so essentially there’s been a dwindling pool of assets. Couple this with the fact that financing is becoming much easier. Credit is generally more available than it was a few years ago and then you tie that in with the fact that interest rates are still very, very low, so it’s quite easy at this point in time to raise the necessary capital to invest in these investments.”

Saying the net lease brokerage market in the Midwest has been underserved, Calkain Cos. has established an office in St. Louis to handle deals in the region.

Teal Henderson, a broker with Reston, Va.-based Calkain for nearly three years in its Tampa office, was selected to run the St. Louis location.

“We felt she was a prime candidate to go there,” executive vice president David Sobelman told Commercial Property Executive. “She has some connections there, some family there and had already been doing some business there. So it was a nice fit.”

“Teal has been an integral part of Calkain’s growth and expansion; we’re very happy that she agreed to open our office in the Midwest,” added Jonathan Hipp, president & CEO.

“The Midwest market has been largely ignored by the triple-net lease investor pool, mainly due to lack of professionals focused on the area,” Henderson said. “As the macroeconomic outlook is improving in primary markets and with the inventory of prime assets still low, the Midwest is now seeing an uptick in investment-grade credit tenants seeking new markets that have the demographics to support the expansion.”

Sobelman said he expected much of the firm’s Midwest business to involve banks, restaurants and drug stores.

“Mainly because the population there wants those types of assets,” he said, adding that tenants are looking for expansion or to open new sites.

“We’re seeing more growth in those markets, and we’re seeing more and more tenants comfortable with building a brand-new building for themselves,” Sobelman added.

Calkain–which also has offices in Fort Lauderdale, Fla.; Bethesda, Md.; and Burlington, Mass.–specializes in assisting buyers and sellers with single- and multi-tenant retail, industrial, hotel and office net lease transactions.

“We feel the net lease properties, as a whole, are one of the most stable assets you can purchase in real estate,” Sobelman concluded. “They are providing a very stable return and most of the time above-market yield.”

Calkain is currently marketing two net-lease portfolios that have Midwest locations. Nineteen Circle K gas station/convenience stores with sites in Indiana, Ohio, Illinois and Iowa are being sold by the Canadian-based parent company, Alimentation Couche-Tard. Sobelman said Patrick Nutt is the lead broker on that listing, but Henderson’s presence in the Midwest market has helped with the marketing. Calkain is also the exclusive broker for a 10-property portfolio of corporate-based Fred’s Stores, a discount retailer with more than 700 locations. Illinois is one of the locations for the stores in the portfolio, along with Kentucky, Arkansas and Mississippi.

Jones Lang LaSalle’s Capital Markets team has secured $48 million in Credit Tenant Leasing financing from a foreign institutional investor for an industrial and bus maintenance complex in Newark, N.J., owned by Hartz Mountain Industries Inc.

The investor provided the 4.323 percent, fixed-rate, 24-year loan for the property at 601 Doremus Ave. that consists of 21.7 acres of land and 638,092 square feet of space that is leased to New Jersey Transit Corp. through 2036.

“This was an extremely complex financing assignment for a very unique property that involved a modified industrial condominium regime. The loan provides financing for a critical facility for New Jersey Transit, in which the entire city’s buses are maintained,” said Joe Garibaldi, JLL managing director, who lead the team on the deal.

Executive vice presidents Brion Haist and Bill Cavagnaro also worked on the financing deal.

The financing derives its proceeds from the direct sale of bonds to investors in the global capital markets rather than capital from commercial real estate lenders. Haist said CTL financing works well for corporations, the federal government, certain municipal government entities and healthcare facilities such as hospitals.

“By and large, most of these rely on the concept of the triple net lease,” Haist said, noting that the New Jersey Transit facility has a triple net lease.

Haist told Commercial Property Executive that the unidentified foreign institutional investor frequently participates in CTL financing because it securitizes the rent stream that comes off the triple net lease.

“The securitization is structured in a way to isolate those rent payments against the credit of the tenant making them,” Haist said, adding that most tenants have credit worthiness that is at or near investment grade.

Haist, who joined the Jones Lang LaSalle Capital Markets team in November, 2010, said his group has done over $8 billion of these types of transactions over the last 10 years, both at JLL and at other firms.

“It’s a focus for our unit,” he said.

Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. In 2011, the team – comprised of more than 1,200 specialists – completed $60 billion in investment sale and debt and equity transactions globally. In the United States, the team grew its volume by 122 percent in 2011 and is gaining market share across all property types.

Inland Real Estate Corp. has been busy in the last month. This week, the firm picked up seven single-tenant retail properties that feature 95,630 square feet of gross leasable area, as well as two grocery-anchored retail properties in Wisconsin. The single-tenant properties, acquired in conjunction with joint-venture partner Inland Private Capital Corp., cost an aggregate $40.8 million, excluding closing costs and adjustments. The Wisconsin grocery centers were taken for $33 million.

The joint-venture purchase acquired a portfolio of two free-standing stores that are net-leased to CVS Pharmacy, as well as one asset net-leased to Walgreens, for $17.1 million. The venture also acquired a second portfolio for $23.7 million that includes one asset net-leased to CVS as well as three properties net-leased to Walgreens. The stores range in size from 12,900 to 14,490 square feet and are located in seven states. At the time of closing, the IRC-IPCC joint venture placed loans of $25.8 millon on the portfolios.

The JV also acquired the Wisconsin properties together. The first asset, a neighborhood shopping center anchored by a Pick ‘n Save grocery, is located in the village of Mt. Pleasant and was acquired for approximately $21.3 million. The second property, a single-tenant asset leased to the same grocery chain, is in Sheboygan and was acquired for approximately $11.7 million. The Mt. Pleasant center totals 83,233 square feet and is 98 percent leased to tenants including Texas Roadhouse and U.S. Cellular. Both assets are newly constructed.

On the last day of February, Inland Real Estate picked up the Cincinnati-area Stone Creek Towne Center for $36 million and, earlier that week, spent $73.4 million on Westgate Shopping Center in Fairview Park, near Cleveland. Scott Carr, executive vice president and chief investment officer for Inland Real Estate Corporation, called the purchases “a way to facilitate operational and leasing efficiencies.” He went on to note that the area’s demographics, coupled with the properties’ positioning, were “acquired at prices that deliver strong returns.”

Recent data from services firm Marcus & Millichap Real Estate Services Inc. shows that the net-lease space is poised for increased buyer interest in 2012. According to a report written by Bill Rose, the firm’s national director of the national retail group, transaction activity for net-leased drugstore properties has jumped 18 percent in the last 12 months. Cap rates have compressed to the mid-6 or low-7 percent range, and investors are increasingly seeing such assets as safety plays to hedge against the risk of the stock market.

Is retail a victim of the Internet and heading the way of the horse and buggy? The big-box stores, which tend to sell merchandise that can be purchased online by consumers, seem particularly hard hit by recent economic and technological trends. Circuit City filed for Chapter 11 bankruptcy protection and closed its stores; Borders liquidated after failing to find a buyer at any price; Filene’s Basement was acquired by Sym’s, which is now liquidating; and Sears, folded into Kmart, is struggling.

The pace of retail store closings in general continues. The 65 million square feet in 4,000 store closings announced by retailers in 2011 represented an increase of 40 percent over the space reduction in 2010, according to the International Council of Shopping Centers (ICSC).

“In the U.S., there is always turnover in the retail market. Stores close all the time,” commented Victor Canalog, vice president of economics and research at Reis Inc. Nevertheless, although he acknowledged that there will always be a need for shopping, Canalog suggested spaces may continue to go dark in future as part of a longer-term trend. “If there is a recovery, there will still be massive competition for the typical customer coming from the Internet,” he said. “Many wonder if the U.S. may have more than enough retail per woman, man and child.”

The good news is that the effects of the retail sector contraction, and in particular, the big-box closings, on the single-tenant net lease sector have been muted, according to net lease players. Randy Blankstein, president of The Boulder Group, observed that in reality, the big-box shutdowns have garnered much attention in the news but have not directly affected a lot of net-leased properties. Agreed Ethan Nessen, managing director of Corporate Realty Investment Capital L.L.C.: “Ten years ago, I would have told you there would have been some form of contagion, but this time around, the effects have really been compartmentalized and isolated from the rest of the market.”

Nessen argued that many of the companies that failed did so for specific reasons, rather than because of pandemic problems in retail. While Sharper Image, Borders and Circuit City have fallen, a slew of other big-box businesses remain very healthy.

“There are very, very strong big-box powerhouses—such as Lowe’s, Walmart and Home Depot—that are not going anywhere,” Nessen affirmed. And smaller-box retail stores—such as restaurants and drug stores—generally tend to be “booming,” he added.

No doubt, the price will fall for any net lease property that is unlucky enough to be on the market when bankruptcy is unexpectedly declared by the tenant. If the retail company is undergoing a Chapter 11, sellers that can afford to be patient may want to take the property off the market and wait it out, suggested Howard Sands, managing director & founding principal of Corporate Partners Capital Group Inc. Investor demand will be low during the period of uncertainty, and if the lease is reaffirmed by the tenant the property value could actually increase, he explained—especially given that the company is likely to emerge from reorganization financially stronger than before.

In a worst-case scenario, in which the store will be shut down in a Chapter 7 bankruptcy, developers and net lease brokers say that emptied retail spaces in core urban areas can be filled in a relatively short period of time. “We do not see them sitting empty for a long time,” said Sidney Domb, president of United Trust Fund, of properties in his Miami market. Blankstein said that in urban locations such as Michigan Avenue in Chicago it could take several weeks for a Borders to re-tenant. Other vacated properties—such as those in secondary or tertiary locations— however, “can sit empty for a year and still not have a possibility for re-tenanting,” he said.

For such reasons, the main effect of the big-box failures is that the quality of the real estate and the tenant becomes even more important to the investor, according to net lease brokers and sponsors. The real or perceived risk of retail company closings “makes investors more motivated to have good-credit tenants,” put in Sands.

The heightened investor preference for investment-grade tenancies has contributed to a decompression in the cap rate differential between properties that are occupied by stronger credit versus those occupied by weaker credit tenants, said Sands. Nevertheless, cap rates for net lease investments overall have now heated up. The fact remains that despite the trends in the larger retail world, investor demand for net lease is still pretty strong in general, driven by low interest rates and paltry returns on alternative investments. Investors are now showing active demand for properties with investment-grade and non-investment-grade tenants, said Sands. “A lot of money has been raised for net lease product,” added Nessen.

Research by The Boulder Group shows that cap rates for all net lease sectors continued to fall in the fourth quarter. The main contributor to the decline is a “shortage of new net-leased development,” according to a company report. Cap rates in the retail net lease sector fell from 7.83 percent at the start of 2011 to 7.72 percent by the fourth quarter. “Ironically, there has been no increase in cap rates in the net lease sector, and if anything there is still a compression,” Nessen agreed.

Another reason for the resilience of net lease as an investment in the wake of larger troubles in the retail sector is that the net lease space is simply much more diversified today. Particular problems in the big box retail segment will not give the entire industry a black eye, Nessen said. That was not always the case. “Ten years ago, there was a lot more concentration on retail and big-box retail in net lease,” he said.

The impact of store closings on the sector has also been minimized by the fact that only some of the big-box users prefer single-tenant space. “A lot of single-tenant properties were scrambling because they lost one big tenant,” cautioned Canalog. But while Borders and Circuit City are more likely to be single-tenant and therefore net leased, most Filene’s Basements are in-line, pointed out Nessen.

As for the long-term trend, opinions differ. Nessen takes an optimistic view. “Maybe there will be a decline in retail in the book, DVD and CD categories. Beyond that, we do not see a decline, and we will continue to see growth overall,” he said. Domb, on the other hand, believes the weakening in the retail sector is real. Because of the lack of demand from companies to engage in sale-leasebacks of retail space, UTF has readjusted its business strategy and shifted its emphasis away from retail build-to-suits in favor of medical office buildings.

“Fewer companies in big box are expanding. We go where the expansion is. Now the expansion is big in medical and manufacturing,” he said. The company has engaged in a $203 million build-to-suit/sale-leaseback transaction—the largest in its history—with the Sisters of Mercy. “Before, we would never be building a hospital/medical (property). We do big boxes,” said Domb. UTF is also working on three other properties, none of which are retail. “In the past, certainly at least one project would have been retail,” said Domb.

For analysis of retail real estate’s performance, turn to “Retail Retracts.”

While the retail sector did not fare as badly as some had feared as a result of high unemployment, fundamentals continue to founder. Balancing the actions of distressed retail real estate tenants with those of expanding tenants, “net on net, we will still see relatively high vacancies for retail real estate,” predicted Victor Canalog, vice president of economics and research at Reis Inc. The retail vacancy rate, he said, still stands at 11 percent, which is a 21-year high. “The rate may decline slightly in 2012, but the only reason is that construction is really, really tight.”

The shuttering of many retail companies, said Canalog, is “absolutely contributing to the lack of demand for retail (space).”

Indeed, according to the International Council of Shopping Centers, the Deltona/Dayton, Fla., MSA, the metro with the second-largest market share (0.9 percent) of total space closed in the fourth quarter, is expected to be disproportionately affected by Sears Holdings’ closings. And most of the 975,000 square feet of retail space lost in the fourth quarter in Boston, the metro with the largest amount of space closed, is attributed to the complete liquidation of Syms and Filene’s Basement stores, according to ICSC.

For more on the impact of big-box retail closures on the net lease investment market, see “Going Dark,” which appeared in the March 2012 issue of CPE.

William Polk Carey, founder and chairman of multi-billion-dollar investment management company W. P. Carey & Co., died of natural causes in West Palm Beach, Fla., on Monday, Jan. 2. Carey, a trailblazer in the sale-leaseback arena, was 81 years old.

Read Commercial Property Executive’s original story on Carey here.

“William Polk Carey was a pioneer in sale-leasebacks,” Sidney Domb, president and CEO of United Trust Fund, a leader in the sale and leaseback of corporate real estate, told CPE. “I started in 1972 and there was a W. P. Carey then. He had vision and foresight to explore and go into Europe with sale-leasebacks when no one else chose to enter. He was fearless in his decisions and he will be missed.”

“As an institutional-quality buyer, they’ve been a very reliable, very well-capitalized, very well-managed firm that’s been a significant player in that niche for many, many years,” Jeff Hughes, senior director in investment sales with leading net lease firm Stan Johnson Co., said, speaking to CPE about the firm Carey founded.

With Carey as a driving force, sale-leasebacks became somewhat of a game-changer.

“He started in the industry 40-plus years ago, and prior to that time, corporate America did not have a very good outlet to take real estate assets off their balance sheet and monetize them in the form of a sale-leaseback transaction,” Hughes noted. “So it’s been a very significant financing mechanism that has allowed corporate America to do just that. If you’re in the business of building widgets then arguably you shouldn’t also be in the business of owning your manufacturing facility or your warehousing facility or your retail outlets. Carey pioneered the concept of taking that real estate off the balance sheet — you don’t need to own it, just sell it and lease it back on a long-term basis. It frees up your capital to plow it back into whatever industry you’re in, it allows you to do 100 percent financing of that asset and it still allows you long-term effective control of the asset through that long-term lease.”

Carey applied the sale-leaseback concept to veritably every sector of commercial real estate around the world. Past transactions include the $58.1 million acquisition of a 473,000-square-foot portfolio of boat fabrication and servicing facilities from a premier U.S. yacht builder, and the simultaneous closing of a 25-year lease agreement with the seller. The firm’s deals in the retail sector include the $154 million purchase of a 1.3 million-square-foot portfolio of retail facilities in Germany from do-it-yourself retailer Hellweg Die Profi-Baumärkte GmbH & Co. KG, which subsequently signed a 25-year lease with W. P. Carey for the space.

“Bill Carey was a pioneer in that industry, pioneering a concept that later became very mainstream in the capital-markets world,” Hughes said. “Many other institutions followed that path and mirrored that strategy, but he was a pioneer in making it commonplace and doing it on a very large and very professional scale for many years.”

Pioneer. It is the word that flows from the mouth of many in the commercial real estate business when ruminating about Carey. “Bill was a pioneer in the net-lease industry and those of us who now work exclusively in this niche owe tribute to his early work,” Bruce S. MacDonald, president of Net Lease Capital Advisors, shared with CPE. “He was a generous individual who gave back to the education and business communities he was a part of.  He leaves the legacy of having contributed to the growth of an industry and of having built a respected firm.

Since his passing, W. P. Carey’s board of directors unanimously elected Benjamin H. Griswold IV, a director with the firm since 2006, as non-executive chairman of the board. “A significant component of Bill’s legacy is the balanced strength of this organization and the quality of our people at all levels, which is consistent with the gold standard he set for himself and others,” Griswold said of the late Carey. “The depth and breadth of the talent within the firm and their dedication to its core beliefs position us well to continue our success and maintain the tradition of excellence that has been emblematic of W. P. Carey throughout its history.”

When Wm. Polk Carey passed away yesterday, he left behind a legacy. The 81-year-old founder & chairman of multibillion-dollar investment management company W. P. Carey & Co. was a trailblazer in the sale-leaseback arena.

A direct descendant of President James K. Polk, Carey, who passed away of natural causes in West Palm Beach, Fla., had leadership in his blood. Armed with a background as a leader in corporate finance, he founded W. P. Carey in 1973 and became one of the founding fathers of the sale-leaseback strategy, molding the company into a top force in long-term sale-leaseback and build-to-suit financing in the commercial real estate industry. The company now boasts a global investment portfolio valued at roughly $11.8 billion.

Among notable transactions, under Carey’s guidance, the company closed a $225 million mega-deal in which it acquired 21 floors of the New York Times Building in Manhattan while simultaneously signing a deal with the newspaper to remain in the space under a 15-year contract.

In addition to his role as a vanguard in commercial real estate, Carey will be remembered as an altruistic individual who was well known in charitable circles. He established the W. P. Carey Foundation in 1988 to support educational opportunities at such colleges as Arizona State University, Johns Hopkins University and the University of Maryland. Carey ensured that his generosity would outlive him by naming the foundation as the primary beneficiary of his common stock in W. P. Carey.

Demand for commercial real estate assets in the face of economic volatility helped compress cap rates for net-lease properties in the third quarter, according to a national survey by the Boulder Group. The market  for single-tenant assets should remain stable through the end of the year as demand for core assets keeps the lid on cap rates.

Released on Tuesday, the analysis by Northbrook, Ill.-based Boulder cited the decline in retail cap rates as the best illustration of the trend. During the third quarter, the bid-ask spread for retail property cap rates declined 20 basis points to 46 basis points. Overall, retail continues to offer the lowest cap rates among the three net-lease property types. Reckoned by asking prices nationwide, the average cap rate for retail properties dropped 25 basis points to end the third quarter at 7.75 percent.

As for the two other major categories of net-lease assets, cap rates for office properties dipped 15 basis points to 8.24 percent, and industrial assets declined 23 basis points to 8.47 percent.

Cap rates declined for generally for restaurants, banks, net-leased federal government properties and leaseholds; ground leases, zero cash-properties, CVS drugstores, and Dollar Brand outlets all registered upticks. Among national retail brands, rates dropped for Walgreens (5 basis points), FedEx (54 basis points) and McDonalds (40 basis points). “Historically low interest rates and a lack of quality single tenant properties were secondary contributing factors to the compression of cap rates that occurred in the third quarter of 2011,” the report said.  Supply of net-leased properties is under pressure from two directions. A development slowdown continues to reduce the volume of new product available to buyers. Retail properties on the market ticked up from 2,256 to 2,360.

A total of 540 office properties were on the market by the end of September, 103 more than during the third quarter and a 19% increase. The industrial sector added 30 new properties during the quarter, bringing the total available to 300 nationwide. Meanwhile, fewer sale-leaseback deals are coming to market because corporations needing to raise capital can turn to cash on hand and low-cost debt.

As for pricing, one-third of the net-lease assets on the market were offered for $1 million or less. The single largest category—39 percent—included properties priced between $1 million and $3 million. Higher-priced assets make up a considerably smaller proportion of what’s available. Eighteen percent of net-lease offerings carry price tags between $3 million and $6 million, and only 11 percent are priced at $6 million or more.