The Best Ever CRE Show JF 3996: STNL Investing, Fed Rate Predictions, and 18% IRR Targets ft. Mike Kron
Aug 13, 2025
Mike Kron, founder of Guardian Advisory, dives into the realm of single tenant net lease (STNL) retail assets, emphasizing their resilience against e-commerce giants like Amazon. He believes now is the ideal time to invest, fueled by anticipated interest rate drops. Kron shares insights on his fund's strategy, targeting an impressive 18% IRR by focusing on long lease terms and high-credit tenants. The discussion also covers the return of bonus depreciation and the evolving landscape of retail, highlighting his commitment to stability and investor-friendly approaches.
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Net Lease Value Linked To Rates
- Net lease retail is highly correlated with interest rates and benefits most when rates fall.
- Buying now targets appreciation from expected cap-rate compression as rates decline.
Match Fund Term To Rate Cycle
- Set a fund term that matches the anticipated interest-rate cycle to capture cap-rate compression.
- Use five years with options to exit early if rates move quickly in your favor.
Buy Caps And Debt Targets
- Target buying caps around 6.5%–6.75% and finance near 6% to hit attractive investor coupons.
- Use life insurance lenders and expect spreads around 180–200bps over Treasuries for high-credit tenants.