Cole Capital’s Investment Strategy
Cole Capital invests primarily in income-producing, strategically located core commercial real estate across the retail, office and industrial sectors. Cole Capital seeks high-quality, creditworthy tenants and long-term net leases, which minimizes the risk of interrupted income.
We are conservative to moderate in our use of financing, targeting a 50% leverage ratio to increase potential total return to investors.The excessive use of financing potentially increases a REITs business risks, potentially hinders the REIT's ability to make distributions and may decrease the value of an investment.
The Net-Lease Advantage
Our simple objective is to collect rent from industry-leading corporations across America and provide a stream of income to our investors. We believe the best way to accomplish this is to buy high-quality, income-producing commercial real estate leased to creditworthy tenants under long-term, net leases.
What are some of the advantages of net-lease real estate?
1. The tenant, not the landlord, is responsible for monthly rental payments as well as the majority of the property operating costs.
2. Industry-leading, creditworthy tenants and lease guarantees minimize risk of interrupted income.
3. The typical net lease is long-term with regular rent increases that can be adjusted for inflation.
|Typical Commercial Lease||Typical Cole Lease|
|Length of lease||3-7 years||10+ years|
|Type of lease||Gross||NN or NNN|
|Responsible for taxes and maintenance||Landlord||Tenant|
What is Core Commercial Real Estate?
An investment portfolio comprised of Core real estate seeks to provide the investor a reasonably stable income stream in the form of regular monthly distributions. These portfolios seek to realize a relatively high percentage of total return from income and are expected to exhibit a relatively low degree of price volatility. These portfolios typically have occupancy rates greater than 90%.
Core commercial real estate
Cole Capital seeks brand-name, necessity retail properties that are integrated into the daily life of consumers, such as single-tenant free standing properties, national superstore and power centers.
Cole Capital focuses on necessity office and industrial properties that are essential to the daily operations of a corporation’s business, such as corporate headquarters, regional distribution centers and warehouses.
1 There is no guarantee that investors will receive a distribution, and distributions paid may be derived from proceeds from the offering, from borrowing or from the sale of assets. Fees and expenses associated with the management of the REIT will impact the ability to pay distributions and the effects of any capital appreciation.
2 There is no guarantee that the shares of the REIT and the underlying properties will appreciate in value.
3 Double Net Lease (NN): Requires the tenant to pay base rent, taxes, maintenance, insurance and utilities.
Triple Net Lease (NNN): Requires the tenant to pay for base rent, net real estate taxes on the leased asset, net building insurance and net common area maintenance.
4 Although Cole targets a 50% leverage ratio, we are not prohibited from exceeding this target, and we may do so.