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Learning The Fundamentals Of Commercial Real Estate Investment With Peter Von Der Ahe

Future Of Net Lease Properties, Will Technology Change In This Area?

The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful:

While the triple net market might be lagging in terms of technology, it’s heading in the direction of other real estate markets like the hotel and travel industry. In today’s hotel industry, one can browse vacant rental properties anywhere in the world from any location they’re in. While an aggregated technological site doesn’t exist quite like that in the triple net market yet, things are heading in that direction. As the buyer pool expands with technology, cap rates can be expected to go down. 

Richard Wilson: In terms of the future of net lease properties, of how they’re identified, valued, traded, invested in, do you see technology drastically changing this area? Or pretty much the same as all the other areas of commercial real estate, people are using technology more now in field sourcing, in connecting with each other – is there any unique trend you’ve seen with net lease properties that’s different than other niches in a way? 

Peter Von Der Ahe: Yeah, I don’t know that I would say it’s particular to net lease, but in the entire real estate industry, real estate as far as all the industries, it’s probably one of the laggards in terms of technology, but technology is bringing a lot more transparency, it’s bringing efficiency. You know it’s crazy if you compare like what Air BnB did to the hotel industry, or a lot of the travel sites for example. If you want to find out what hotels are available in Los Angeles, for example, you can do that from your desktop anywhere in the country. If you wanted to find out all the triple nets that were available in some city, or any piece of real estate for that matter, we still don’t have an aggregated technological site or company that has figured that out and there are several different reasons for that, but it’s heading in that direction. So that transparency, I think you were asking about the long term implications, and we could go into crowd funding and some other things, but as the information is more democratized, as the access and opportunities to invest in these asset classes are democratized, in theory that should bring cap rates down because you’re expanding the buyer pool. You’re making it more transparent, and you’re making it more easily accessible. 

Richard: Okay, great. 

Peter: That was exciting. 

Richard: Yeah, for sure, and it sounds like there’s some big changes coming.

About the author

Richard Wilson