Behringer Harvard Taps Watt to Head Net Lease Platform
- Nov 13, 2012
Behringer Harvard is launching a new net lease platform, and the investment manager has tapped longtime industry player Brad Watt to move the effort forward.
Watt comes to the table with 25 years of experience, having demonstrated his skill in the 1031 exchange market in executive positions with such respected real estate investment firms as Embree Capital Markets Group, American Realty Capital, Cole Real Estate Investments and CNL Income and Growth Funds. And the list goes on. His history in structuring, marketing and managing real estate investment programs involving assets totaling in excess of $4 billion.
At Behringer Harvard, Watt will concentrate on the arrangement and distribution of high-quality 1031 Delaware Statutory Trust programs, as well as certain other private real estate wealth management vehicles, with the goal of producing high levels of enhanced fixed income and tax efficiency.
“Investor interest in 1031 exchange programs has resurged in the last year as investors search for high-quality investment solutions that focus on capital preservation and repeatable cash distributions,” Frank Muller, executive vice president and head of distribution with Behringer Harvard, said in a prepared statement. “We believe that adding a net lease strategy to our alternative investment programs is a logical extension of our existing investment management business. Brad’s leadership will be a valuable asset to the team that will provide net lease programs that address this growing market demand and enhance our position as an industry leader in high-quality alternative investment programs.”
The importance of timing is indisputable in any new endeavor, and it appears that given the current climate in the commercial real estate market, Behringer Harvard is kicking off its net lease program at the right time. “What we’re seeing in the market today is there is a surplus of demand and a lack of supply, due to the fact that we saw a stoppage in new construction during the recession,” Winston Orzechowski, research director with commercial real estate brokerage and consulting services provider Calkain Cos., told Commercial Property Executive. “With the drop in interest rates and the willingness to finance, people all of a sudden have access to more capital and at lower cap rates people are wanting to utilize this capital. And the reason why they are going to net leases has to do with the security the asset offers.”
Behringer Harvard has not specified just what property types it will pursue under its new net lease programs, but the retail sector certainly has its advantages. “Properties with tenants like Walgreens or McDonald’s have corporate guarantees, so people feel safe investing in that type of asset,” Orzechowski added. “And what also makes it attractive is the way the lease is structured. The owner really doesn’t have to be involved in management; the corporation takes care of it.”
Behringer Harvard’s net lease program will focus on high-quality, single-tenant assets occupied by investment-grade tenants under long-term, double and triple net lease agreements.