Commercial Investment Real Estate July/August 2017 | Page 8

TRENDS
2016 Net-Lease Volume
Breakdown by Property Type
Grocers Beware:
Disruption Is on
the Horizon
“Shoppers in the coming years will think
nothing of using voice-activated devices
like Amazon’s Echo to restock their kitch-
ens. They’ll habitually cook meals with
ingredients delivered by the likes of Blue
Apron, or drive to kiosks outside of their
neighborhood store to pick up groceries
after work. We’re already seeing this
kind of channel fragmentation and
disintermediation across the indus-
try, and it will only accelerate.”
—Joe McKeska, president of Elkhorn
Real Estate Partners
6
July | August 2017
Net-Lease
Retail Volume:
40% 27%
Net-Lease
Industrial Volume:
33%
Source: Real Capital Analytics, Q1 2017
Where Transitional Lending
Fits into CRE Lending Market*
Source: Cushman & Wakefi eld
Net-Lease
Office Volume:
EQUITY LIKE
MEZZANINE
TRANSITIONAL
• Millennials make 54% of their pur-
chases online, up from 51% in 2015
and 5% higher than online purchases
by other generations.
• Millennials don’t view the world
through channels. Smartphones, tab-
lets, social media, stores, and every-
thing else are all one big ecosystem.
• To survive, retailers must integrate
their thinking, systems, and ways of
doing business.
• Digital natives are either a force to
contend with — or to succeed with.
Millennials Moving
the Needle on Retail
TRADITIONAL
MARKET
L+100–250BPS
L+350–550BPS
8–12% YIELD
15–20% YIELD
* Ranges are unleveraged estimates based on Q4 2016 markets. L+ indicates LIBOR+.
Source: Amherst Capital Management
COMMERCIAL INVESTMENT REAL ESTATE