The FORT Podcast: Vince Knipp – Senior MD Investments at Marcus Millichap – Single Tenant Retail NNN Assets 101
Vincent Knipp is a Senior Managing Director of Investments in Marcus & Millichap’s Dallas office, where he specializes in net lease investment sales across the United States. Knipp has been the #1 Net Lease Agent in Texas and consistently ranks in the Top 10 Nationally within Marcus & Millichap’s National Retail Group. Over the course of his career, he has closed more than 350 transactions totaling nearly $1 billion in volume in 29 states.
On this episode, Chris and Vince discuss the market for single-tenant NNN assets, 1031’s, what makes a good investment in this asset class, what makes a great broker, and a lot more. Enjoy!
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(02:14) – Vince’s Upbringing and Early Career
(05:11) – What were your first years as a broker like?
(07:06) – What’s the mythical ‘database’ that all Marcus agents build?
(08:20) – What did Marcus teach you about making your first calls as a broker?
(10:19) – What makes great retail?
(12:47) – Why do you put all the multi-tenant buildings with your partner?
(15:33) – Who are the typical sellers you work with?
(19:56) – Who are the typical buyers you work with?
(21:32) – How do you value a property in a major metro vs. a smaller town?
(24:14) – In markets where rents are growing quickly, are there a lot of buyers who will buy on a 2 cap and wait it out?
(27:01) – Ground Leases vs. Fee Simple Deals
(29:04) – What usually happens when a tenant leaves their building?
(30:33) – Are all of these leases pretty much the same?
(32:51) – Percentage Rent Clauses
(33:54) – Rent-to-Sales Ratios
(36:44) – Why do people leave?
(38:02) – What other factors are there in leases that are desirable?
(39:54) – Why do sales go down and is it usually tenant-specific?
(41:33) – How much do you pay attention to the specific products your tenants sell?
(42:29) – Are there ever demands from tenants that they’ll only sign unless you agree to not sell the building?
(43:40) – How much does access matter to you, tenants and customers?
(43:35) – All-for-One, One-for-All Scenarios of Tenants
(46:26) – What are tenants requesting now that we’ve been through Covid?
(48:39) – Has the upsurge in drive-through changed things permanently?
(51:52) – Are cosmetic upgrades usually on the operator and not the landlord?
(53:24) – What do you tell people in a transaction that costs 2x more than replacement costs?
(54:40) – Are there any up-and-coming tenants you have your eye on?
(56:05) – How do you conduct due diligence without ever seeing the property in person?
(57:48) – Do ghost kitchens make you nervous?
(58:51) – What’s your favorite deal you’ve ever done?
(1:01:51) – Will you do deals anywhere or are you only based in Texas?
(1:02:32) – Is there a reason you’ve stayed with Marcus for so long?
(1:04:17) – Is there a way to share information across all of Marcus’ agents?
(1:05:45) – Is there anything in the industry that still really excites you after being in it for 15 years?
(1:07:20) – Underwriting Deals with a Franchisee vs. a Franchiser
(1:09:16) – What can go wrong once you’re under contract?
(1:11:34) – How much volume are you expecting for the rest of 2021?
(1:13:20) – How do you sell a ‘party center’ deal?
(1:15:31) – What advice would you give to people getting into the industry today?
Episode Summary
Vince Knipp, an astute expert in the real estate sector, brings forth a wealth of insights and practical advice. The conversation embarks on the note of understanding and nurturing partnerships with tenants. Knipp elucidates the significance of a cooperative and understanding relationship between landlords and tenants. He recommends landlords to adopt a flexible and supportive approach towards tenants facing challenges, ensuring a harmonious, mutually beneficial tenancy relationship.
The dialogue seamlessly transitions to the realm of leasing. Knipp underscores the paramount importance of ascertaining tenant credibility and financial stability. He emphasizes the critical role of comprehensive background checks and detailed financial assessments, ensuring the onboarding of reliable and financially secure tenants. This approach stands as a cornerstone for ensuring sustained rental income and mitigating potential tenancy issues, contributing to the overall success of real estate ventures.
Navigating further, Knipp delves into the intricacies of property management and maintenance. He champions the cause of proactive, timely property maintenance, ensuring the assets remain in impeccable condition. This approach enhances tenant satisfaction, ensures the longevity of properties, and contributes to the retention and enhancement of property values, ensuring maximized returns on real estate investments.
In the domain of property value enhancement, Knipp shares invaluable insights. He highlights the role of strategic, well-planned property upgrades and renovations in augmenting property appeal and value. These enhancements play a pivotal role in attracting premium tenants, ensuring consistent, lucrative rental incomes, and maximizing the overall value and profitability of real estate investments.
As the conversation unfolds, Knipp offers a pragmatic view of the challenges in real estate management and investment. He presents tangible solutions and strategies for effectively navigating these complexities, ensuring seamless, efficient real estate operations. His insights resonate as a practical guide, contributing to the successful, profitable management and growth of real estate investments.
Delving into market dynamics, Knipp offers a panoramic view of the current real estate landscape. His discussion illuminates the emerging trends, opportunities, and challenges, equipping investors with a comprehensive, in-depth market understanding. This knowledge stands as a crucial asset for making informed, strategic investment decisions, ensuring alignment with market dynamics, and maximizing investment success.
On the technological front, Knipp highlights the transformative impact of technology on real estate operations. He discusses the myriad benefits of technological integration in enhancing operational efficiency, precision, and profitability. The use of advanced technologies in property management, investment analysis, and decision-making processes emerges as a game-changer, ensuring the superior performance and growth of real estate ventures.
The conversation further explores the world of real estate investment and financing. Knipp provides a detailed, comprehensive overview of diverse financing options, investment strategies, and financial management approaches. His discussion stands as a beacon of guidance for investors, ensuring astute, strategic financial planning and management, contributing to the robust financial health and growth of real estate investments.
The FORT is produced by Johnny Peterson & Straight Up Podcasts