AEI Puts Up $100M to Build, Buy Net Leased Retail Assets

St. Paul, Minn.-based AEI Capital Corp. has revealed a planned $100 million equity contribution for the development and purchase of net leased retail properties in various markets across the U.S., but primarily in Minnesota. The capital is being raised through the company’s net lease property investment funds. AEI is an all cash-investment concern, so its pursuit of properties to buy and projects to develop is not hindered by today’s chilly lending market. As for buying existing net leased retail assets, competition in the market is anything but steep. The unavailability of viable debt in the capital markets and the fact that many lenders have reached maximum capacity on loans for the year are keeping previously active investors out of the game, as per a third quarter report by private equity real estate funds sponsor Boulder Net Lease Funds L.L.C. However, there remains a rather significant disparity between asking and bidding prices, so some sellers are playing the waiting game in hopes of putting assets on the market when the gap has decreased. So, in many areas, the pool of for-sale properties is slim, which is where AEI’s development endeavors could come into play.  AEI has not disclosed specifics on the other locations beyond Minnesota that will be targeted. Currently, in general, net leased retail assets are more plentiful than office and industrial assets put together. As per the Boulder Net Lease report, there are 10,078 net leased retail properties available for sale across the country, while there are only 4,936 office and 3,422 industrial assets up for grabs. Other targeted locales aside, the company’s cash could go a long way in Minnesota, as the average price of net leased retail properties in the state is a bit over $3.5 million or, more specifically, $234.52 per square-foot.  Established in 1970, AEI holds the distinction of being the oldest sponsor of commercial real estate investment funds in the country. The company has launched 33 public and private net lease property investment funds over the last 33 years. Through its investment funds, AEI’s portfolio presently encompasses over 160 properties spanning 36 states.