CALIFORNIANS MOVING TO ST. LOUIS?
Catchy headline though not exactly the case… people are not moving here but the money is. Money from both coasts continues to “move” to St. Louis where investment grade as well as all real estate (including farmland) is seen as a bargain compared to national pricing and thus a place to invest surplus capital.
In March Duke Properties put their 4.3 million Sq.Ft. St. Louis Industrial Portfolio on the market which went under contract immediately after multiple bids. The property closed last Thursday around a 5.5% Cap rate (about $70 PSF) which is a record price for an older St. Louis industrial portfolio. The buyer was Exeter Properties out of Philadelphia who now owns over 13 Million square feet of industrial properties in St. Louis.
Hilliker Agents continue to see record sale prices across the board for St. Louis area properties. Even office sales and leasing which were predicted by many to suffer from the pandemic are at or above pre-covid pricing in most cases. See below for a nice story about a recent Hilliker brokered office transaction. Another story shows how Hilliker agents are able to partner with agents from our affiliate Westwood Net Lease Advisors to give our clients a combined level of experience and knowledge. These are interesting times and opportunity is abundant if you know where to look and have the right guide. Call your favorite Hilliker or Westwood Agent to review your real estate needs and goals.
Transforming Commercial Space:
Former culinary school has the right mix of ingredients for law firm
By Terri Waters
L’Ecole Culinaire, the now-shuttered chef training school, was known as much for its culinary programs as it was for the high visibility of its two buildings on I-64 in Ladue.
More than 150,000 commuters saw the prominent name with the chef’s hat logo on the side of one of the buildings every day for at least a decade.
Now a new tenant is moving into the building at 9807 South 40 Drive where culinary students prepared and served meals for the public. Stephen Schultz, co-founder of personal injury law firm Schultz & Myers, is thrilled to have his company name on a building that will be seen by so many people. He has billboards all over town, and visibility of the I-64 building will act as a permanent billboard for many years to come.
“It’s nice to have that brand awareness when people drive by on 40,” says Schultz. “I tell people we’re now in the L’Ecole Culinaire building and they say ‘oh yeah.’ They know right where it is.”
The former school operated by Vatterott College occupied two buildings next to each other on South 40 Drive. Schultz & Myers is moving into the smaller of the two this month and will welcome clients to their offices beginning on July 1.St. Louis Bank moved into the larger L’Ecole building in April 2020. Hilliker agents Jeff Altvater and Rebecca Thessen handled both transactions on behalf of the owner, Southwestern Enterprises, Inc.
[Click here to read more]
FROM MATTRESSES TO MARTINIS
What do you do with an empty Mattress Firm building in St. Ann? The Owners of 12131 St. Charles Rock Rd. were faced with this dilemma when their investment grade tenant chose not to renew their Triple Net Lease. Fortunately, they turned to Hilliker Corp. for help.
“The biggest challenge with a triple net investment property is this possibility of your national tenant moving out at the expiration of their lease term” stated Hilliker listing agent Hal Ball. “Fortunately, this property was a very re-useable box.” Ball teamed up with Vince Vatterott at Hilliker’s affiliate Westwood Net Lease Advisors to market the upcoming vacancy from both a local and national level and sought either a buyer or tenant to increase the odds for prompt success.
The property was listed during the height of Covid in spring of 2020. First Ball and Vatterott worked with the Tenant and Ownership to extend the existing lease for nine months through February of 2021 keeping cash flow in place for Ownership. Then the Ball/Vatterott team located Ace Beverages a locate entrepreneur looking to expand their local string of liquor stores. It was an ideal fit.
Ball & Vatterott helped the Buyers work their way through St. Ann to receive appropriate permits and “Cheers” the deal was closed to everyone’s satisfaction in April 2021– most notably the Sellers who did not miss a day of rent. Yet another example where Hilliker Corp’s local entrepreneurial knowledge can be teamed up to our affiliate Westwood Net Lease Advisor’s national investment knowledge to provide top results for our clients. Call today to discuss your goals or challenges…
What is the Smallest NNN Investment Opportunity? The Largest?
One unique attribute of investing in triple net (NNN) lease properties versus other commercial real estate is the low barrier to entry. For as little as $1.3 million, you can own a property tenanted by a major brand and receive guaranteed income with very few or no landlord costs for as many as 15 years.
Though $1.3 million isn’t the smallest NNN investment opportunity, and the sky’s the limit when it comes to the largest NNN investment opportunity, there is a median range for high-quality triple net investments with pricing options based on a few key factors.
Low-Cost NNN Properties
In most cases, NNN lease properties start around $1,000,000. The most common low-cost NNN investment and frankly, the best option for staying around the $1–2 million mark, is Dollar General.
The average Dollar General is around $1.3 million with a cap rate between 5.00–6.50%. This is for a property with a full-term or near-full-term lease. Properties with lower price points do exist, but they usually have short-term leases and may include landlord expenses of roof, parking lot, and structure. Typically, lower-priced, higher-cap-rate, shorter-term lease properties carry more risk. Generally, it is also more difficult to finance higher-risk properties.
Other NNN Property Investments with Lower Price Points:
- Fast-food/QSR restaurants, such as McDonald’s, KFC, Dunkin’ Donuts, and Arby’s typically start at $1.5–3 million.
- A few healthcare/medical properties, such as DaVita/Fresenius, Aspen Dental, AMC Urgent Care can start around $2 million.
- Some convenience stores carry NNN leases, such as 7-Eleven and Wawa, and range from $1–2 million.
Estoppel: What’s that?
If you ever purchase a commercial property with a Tenant in place you will run across this $64 legal term.
Derived from the Latin “stuppa” to stop with caulk, to plug or bung, (guess they had a lot of leaks in ancient Rome) “Estoppel” is a legal concept taught in 1st year law school, that prevents one from asserting a claim that contradicts what one has said before. In laymen’s terms, “you can’t change your story once you agree to it” you are legally “estopped” from leaking your story backwards.
In Commercial Real Estate a “letter of Estoppel” or “Estoppel certificate” is simply a document that outlines the basic terms for a lease agreement signed by the Tenant to confirm all the written terms are still valid. Lenders often require these and, while a pain for agents, they are generally a good idea to obtain. The last thing you want to hear without a Letter of Estoppel is “No, I do not have to pay for that half of the building because my last Landlord said I could use it for free…”
MEET THE NEW MARKETING ASSISTANT
We are pleased to welcome Brianna Gooden to the Hiliker team! Brianna was born and raised here in the St. Louis metro area and currently resides in the Soulard neighborhood with her husband and husky. Brianna graduated in 2019 with a bachelors degree in Graphic Design and Media Arts. With her sharp attention to detail and imaginative personality, Brianna has been creating innovative designs and has been a welcome addition to the marketing team.
St. Charles, MO 63301
1227 Fern Ridge Parkway
St. Louis, MO 63141
225 South Main St.
O’Fallon, MO 63366
4679 World Parkway Circle
St. Louis, MO 63134
20,412 Sq.Ft. Office/Warehouse for Lease. Contact: Meade Summers
65 Schaper Rd.
Foristell, MO 63348
This 9.5 Acre property has great I-70 Visibility, a 3,000 Sq. Ft. office/shop, a 3,500 warehouse, and a single family home less than 1/4 mile from the new interchange.
Contact:: Peter Newton
[Click here to read more]
14779-14787 Manchester Road
Ballwin, MO 63011
5,595 Sq.Ft. Retail building. Sold for $985,000.00 by broker
2085 Collier Corporate Parkway St. Charles, MO 63303
2,000 Sq. Ft. Office building.
Sold for $225,000.00 by broker
4907 Minnesota St. Louis, MO 63111
13266 Lakefront Dr. Earth City, MO 63045
WESTWOOD FEATURED PROPERTIES
CVS Property sold for
$8,209,679 by broker
Dollar General property sold for
$1,565,500 by broker
Singleton Marine property sold for $6,045,000 by broker
St. Louis, MO
Family Dollar property sold for $1,000,000 by broker
ABOUT HILLIKER CORPORATION
Hilliker Corporation brokers commercial real estate transactions for regional and national entrepreneurs to help them achieve their business goals. St. Louis’ largest independently owned commercial real estate company, Hilliker Corporation is centrally located at 1401 S. Brentwood Blvd. The firm’s agents, who each average over 15 years of experience, have completed more than 10,000 commercial transactions for office, industrial, retail, and institutional clients since its inception in 1985. Hilliker’s brokers are available at 314.781.0001, or online at hillikercorp.com.