REITs : Net Lease vs. Gross Lease

An excellent overview from
https://www.dividend.com/how-to-invest/reits-net-lease-vs-gross-lease/



Have you ever wished for the safety of bonds, but the return potential of common stocks? If so, preferred stocks are potentially a good choice to explore.

Real Estate Investment Trusts (REITs) are one of the most dividend-rich segments of the financial market. Understanding the lease structure of commercial REITs can help you identify optimal investment opportunities to include in your portfolio.

Commercial REITs give investors exposure to income-producing real estate in the form of offices, apartment buildings, warehouses, shopping centers and hotels, among others. Commercial real estate leases are generally broken down into three basic categories, which are based on two rent calculation methods: net and gross.

A gross lease requires the tenant to pay one lump sum for a rental property from which the landlord deducts expenses. A net lease has a smaller rental rate but requires the tenant to pay for other expenses.

Click here to learn more about the different types of REITs.

Gross Lease

Under a gross lease, the rent is all-inclusive, which means the landlord pays for all or most of the expenses associated with the property. This includes taxes, insurance, maintenance, utilities and janitorial services. A gross lease offers predictability for the tenant because they can forecast expenses without worrying about unexpected costs like maintenance. Under this arrangement, the landlord assumes all responsibility for maintaining the building.

Net Lease

In a net lease, the tenant is charged a lower base rent for the commercial space and is also on the hook for some or all of the associated costs. These costs often include real estate taxes, property insurance and common area maintenance items. Net leases are broken down into three sub-categories: single net lease, double net lease and triple net lease. Below is a breakdown of each.

• Single Net Lease: Tenant pays base rent plus a pro-rata share of the property tax, utilities and janitorial services. The landlord pays all other building expenses.

• Double Net Lease*: Tenant pays rent plus a pro-rata share of property tax and insurance, as well as janitorial and utility expenses. The landlord pays for repairs and common area maintenance.

• Triple Net Lease: Tenant pays all or part of the property taxes, insurance and common area maintenance on top of a base monthly rent. These tend to be more landlord friendly as they ensure predictability, which can help landlords better manage expenses down the road.

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Modified Gross Lease

To bridge the two calculation methods, there’s something called a modified gross lease. While similar to the gross lease in that the rent is requested up front in one lump sum, it can include any or all of the associated “nets,” such as property taxes, insurance and common area maintenance. For most buildings, utilities and janitorial services are excluded from the rent and covered by the tenant. The modified gross lease has proven to be more popular with tenants because it provides greater flexibility.

Use the Dividend Screener to find high-quality dividend stocks. You can even screen stocks with DARSratings above a certain threshold.

Implications for Investors

For investors, REITs with a triple net lease structure are easier to predict in terms of dividend payment. This makes them more attractive for yield-seeking investors, especially those nearing retirement or looking for steady income growth. STORE Capital (STOR ) is one of the most notable triple net REITproviders. The company focuses primarily on fragmented subsectors of the leasing industry, including middle-market and larger companies that don’t have credit ratings. As of 2017, STORE’s leadership team had invested more than $12 billion across 8,000 properties.

REITs structured around single or double net leases also make good investments. For example, W.P. Carey(WPC ) is a global provider of net lease REITs focused on long-term, sale-leaseback and build-to-suit financing solutions.

Realty Income (O ) is a net lease REIT that offers diversification across tenants, industry and geography. By the end of 2017, Realty Income had a portfolio of nearly 250 commercial tenants across 47 industries. It has also proactively managed rollover, including a 99.5% recapture (i.e., re-leasing prior rent).

Although REITs offer tremendous dividend-earning potential, they are highly sensitive to economic cycles and real estate dynamics. Historically, they have underperformed the market during periods of rising interest rates. As we’ve seen during the Federal Reserve’s latest rate-tightening cycle, higher borrowing costs have already impacted the market negatively. Investors should also pay attention to upfront fees, which tend to be exorbitant for non-traded REITs that might require an upfront fee of between 9 and 15%.

Don’t forget to read this article to learn more about how a REIT is valued.

The Final Word

Net lease REITs with long-term leases can provide your portfolio with a sense of stability and transparency. As the previous discussion illustrated, the triple net lease structure offers the most predictability for investors looking for stable earnings over long durations.

Sample Mediation Ground Rules

by James MelamedAugust 2018

Mediators often assist participants to identify guidelines or ground rules to help support productive communications. Here are some sample mediation ground rules participants may want to consider adopting.

Gentle reminders from the mediator. e.g., "Didn't you guys agree to not interrupt?" are usually sufficient to stay on track.

In the event that discussions are problematic, the mediator can also do a more generalized "relevancy check," asking, "how is this discussion taking us where we want to go . . . as, if it is not, perhaps we can make new progress by . . ." The "relevancy check" is a transition technique between that which is not working and that which might work.

Here are sample suggested ground rules for mediation participants:

1. We agree to take turns speaking and to try to not interrupt each other.

2. We agree to call each other by our first names, not "he" or "she" or worse.

3. We will ask questions of each other for the purposes of gaining clarity and understanding and not as attacks.

4. We agree to try to avoid establishing hard positions and express ourselves in terms of our needs and desires and the outcomes that we wish to create.

5. We agree to listen respectfully and sincerely try to understand the other's needs and interests.

6. We recognize that, even if we do not agree with it, each of us is entitled to our own perspective.

7. We will seek to avoid dwelling on things that did not work in the past, and instead focus on the future we want to create.

8. We agree to make a conscious, sincere effort to refrain from unproductive arguing, venting, and narration and agree to use our time in mediation to work toward what we perceive to be our most constructive agreement possible.

9. We will speak up if something is not working for us in the mediation.

10. We will request a break if helpful.

11. While in mediation, we will refrain from furthering adversarial legal proceedings, except in the case of an emergency necessitating such action.

12. We will point out if we feel the mediator is not impartial as to person and neutral as to result.

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Biography

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Jim Melamed co-founded Mediate.com in 1996 and has served as CEO of Mediate.com ever since.  Mediate.com received the American Bar Association's 2010 Institutional Problem Solver Award.

Before Mediate.com, Jim founded The Mediation Center in Eugene, Oregon in 1983 and served as Executive Director of the Academy of Family Mediators (AFM) from 1987 to 1993. Jim was also the first President and Executive Director of the Oregon Mediation Association (1985-86).

Jim's undergraduate degree is in in psychology from Stanford University and his law degree is from the University of Oregon.

Jim has received the following awards: The Oregon Mediation Association's 2003 Award for Excellence; The Oregon State Bar's 2006 Sidney Lezak Award of Excellence; The Association for Conflict Resolution (ACR) 2007 John Haynes Distinguished Mediator Award; The 2012 Academy of Professional Family Mediators (APFM) "Getting To Yes" Award; and The APFM's first APFM Outstanding Mediator Award (2018).

https://www.mediate.com/articles/melamed7.cfmAuthor WebsiteAdditional articles by Jim Melamed

Only Your Best Work

Stop Doing Low-Value Work

Some good reminders from Harvard Business Review

By Priscilla Claman

In the past, time management experts would recommend that you divide up your work into A tasks, B tasks, and C tasks. The concept was to do the A tasks first, then the B tasks, then the C tasks, when you can get to them. If priorities changed, you just changed the order of your As, Bs, and Cs. Doing all aspects of a job seemed possible then, if you just followed some basic time management rules.

That kind of thinking ended during the recession of 2007-2009. Between January 2008 and February 2010, 8.8 million jobs were lost. Although the jobs went away, much of the work didn’t. Teachers ended up with more children in a classroom; customer service representatives ended up with more phone calls; and managers ended up with more people to manage as teams were consolidated. No matter the job, everyone ended up with a lot more work. And although there have been real gains in productivity since then, the days of A, B, and C tasks are over. Overwhelmed is the new normal.

Therefore, it’s actually a matter of professional life or death to get rid of your low-value work – tasks that mean little or nothing to customers or colleagues. Take an active approach. Design a new, do-able job for yourself. Here’s when to do it:

When you start a new job, you have a fresh perspective on what has to be done and you can see the low-value work more easily. Take a look at everything on your plate. Propose three-month goals to your manager, getting rid of as many useless tasks as you can.

When more responsibility is added to what you already do, you have an opportunity to restructure your work and present your plan. Offer choices to your manager: “Should I lead this task force considering it will take approximately 20% of my time? Or, should I…?”

When there is a reorganization, you have to be careful not to take on too much. People have a tendency to think they can’t say no or they will be the next person laid off. But actually, after a reorganization, the survivors are critical to the organization’s future success, so if you offer to restructure you own job, it will typically be perceived positively.

When you have done an amazing job of something and everyone is celebrating, it’s a great time to ask for something. Ask for help reducing your low-value work from your company’s productivity unit or information technology gurus.

And here’s how to do it:

Vote it off the island. A smart controller had been producing monthly reports for years that nobody read. He sent around a list of them and asked for votes for the most important three or four. He stopped producing the ones nobody used. Another approach is to ask your clients if you can not do something, just the way retail store clerks now ask people if they really want their receipts. The idea is simply to stop doing something that isn’t important, but to check first so that it doesn’t get you into trouble.

Automate it. If it’s low value, it’s easy to automate. Just find a friend in your IT function to help you do it. Whether you are talking about scheduling, acknowledging, or making standard arrangements, there are probably existing applications that you could use. Just figure out what you want to do, and find someone to help you do it.

Write your own rules. Limit what you are going to do and then make sure people know your rules. A professor decided to write personal references only for her advisees or the students in her seminars, and announced the fact to her lecture classes. It saved her hours of time.

Every week, block off the same time for yourself at work. Use the time to figure out how to get rid of your low-value work. Just an hour can make a difference. Pick a time, and stick to it. Close your door, if you have one, or find a conference room. It may take a while before people learn not to interrupt you during that time, but if you are politely persistent, it will work. Or, take the pediatrician approach and hold call-in hours — let people know when you will be available for interruptions of all kinds, and when you will not.

Redesign your own job. It’s your job, after all. Make it work for you. And stop doing that low-value work.

This post originally appeared on Harvard Business Review. 

Morgan Stanley buying Solium Capital shrinking field of billion-dollar Canadian tech companies

U.S. financial services giant Morgan Stanley is buying Calgary-based Solium Capital Inc. for $1.1-billion in the latest deal that will wrest a sizable technology player from Canadian control.

https://www.theglobeandmail.com/business/article-morgan-stanley-is-buying-calgarys-solium-capital-for-11-billion/

Liked on YouTube: James Blunt "You're Beautiful" & "Bonfire Heart" - Nobel Peace Prize Concert

https://www.youtube.com/watch?v=J43Z9XKj4DA

Blast from the past - Happy New Year!

Validating & Non-Validating statements

How to Validate Someone's Feelings

In this Article:Listening and RespondingEmpathizing with the PersonAvoiding Non-Validating ResponsesCommunity Q&A     ExpertReviewed

Validating feelings involves recognizing someone's feelings and acknowledging them as important. In any healthy relationship, it's important to validate someone's feelings when they're upset. Start by listening and responding in simple terms. From there, try to empathize as much as you can. Remember, you don't have to agree with someone's feelings or choices to acknowledge their emotions are valid.

Method1

Listening and Responding

1. 1
   Give verbal responses to show you're listening. Validation starts by basic listening. It's important to give brief verbal responses to show someone you hear them. Say things like, "Okay," "Uh-huh", and "I see" while the person is talking so they feel heard.^[1]
2. 2
   Use body language to show that you're listening. Look at them, and turn your head or entire body towards them while they speak. You may want to stop whatever else you are doing. Show that you are attentive and present.
   

   • If you are doing something else while you listen (e.g. folding laundry or cooking), then look periodically at the person and use other cues to show you're paying attention.
   • If your body language is affected by a disability, you can still show that you are listening. Try accommodating your needs (e.g. fidgeting with one hand while looking at their chin) or explaining outright that your body language is different, but you are still listening.
3. 3
   Stay present. The most basic form of validation is to stay with them, even when their feelings are difficult or unpleasant. Put aside your own discomfort, and focus entirely on being there for them. Here are some ways to show you are listening:
   

   • Holding their hand with consent
   • Looking directly at them
   • Sitting with them or rubbing their back with consent
   • Saying "I'm here"
4. 4
   Respond to their general mood and energy level. If someone is excited, let yourself get happy or excited too. If they're sad, be sympathetic. If they're nervous, be comforting and understanding. Mirroring their energy level, and responding to their mood, helps them feel understood.
   

   • For example, if your best friend is very excited about his first date with someone new, he might appreciate you getting excited with him or showing happiness. On the other hand, if he's tentative about it, then you getting too excited might make him feel smothered. It's important to get a good read on how energetic or enthusiastic a person is.
5. 
   

   
   5
   Ask clarifying questions. When a person finishes expressing themselves, ask questions to clarify. This allows someone to elaborate on their feelings and thoughts in a fashion so they feel completely heard.^[2]
   

   • For example, say something like, "So, how did that make you feel?" or "What do you think about that?"
6. 
   

   
   6
   Repeat their words back to them. After someone is done expressing their thoughts and feelings, repeat their words back. It may feel a little silly, but this validates their thoughts by acknowledging you heard and understood them. Try things like:^[3]
   

   • "So you're frustrated that the professor gave you so little warning."
   • "Wow, you seem really excited!"
   • "That must have been hard."
   • "Tell me if I've got this straight. You felt hurt when my brother mimicked your disability accent, and I didn't say anything?"
7. 
   
   7
   Strive to talk less and listen more. You may have a lot of things to say about someone's thoughts and feelings. Even if you insights are helpful, when someone is first expressing themselves, you should strive to primarily listen. Avoid interrupting or interjecting until someone stops talking.^[4]
   

   • Avoid giving advice at this point, because it may make the person feel like your response is superficial or that you aren't acknowledging their feelings. Instead, focus on just listening and being there for them. They may experience their own revelations about the situation just from you being there to listen.

Method2

Empathizing with the Person

1. 1
   Help them elaborate on their feelings. After someone has expressed themselves, see if you can help them elaborate a bit about what they're feeling and why. For example, you could say something like, "I imagine you're feeling pretty hurt?" This will show the person their feelings matter to you and you're trying to understand them.^[5]
   

   • If your guess is accurate, they'll likely say "yes, and..." and elaborate on their feelings. If your guess is wrong, they'll likely say "no, actually..." and explain how they truly feel. Either way, you're giving them an opportunity to elaborate and process things.
2. 
   

   
   2
   Recall a similar experience you've had. If possible, show the person you understand by relating a similar experience. Then circle back to how you felt, and how their feelings are understandable. This can help them feel validated.^[6]
   

   • For example, if a friend didn't get invited on his sisters' vacation, you could say, "Yes, loneliness is really hard. My brother and cousin do a camping trip every year, and I'm never invited. It makes me disappointed and sad that I'm left out of the loop. I totally get why you feel down about not being invited to your sisters' thing. It's not fun to be left out."
3. 3
   Normalize their reaction. If you haven't had a similar experience, you can still help validate the person's feelings. You can say something like, "I think most people in that situation would feel that way." This shows you think their reactions are reasonable and they have the right to be experiencing the emotions they're experiencing. Try some of the following:^[7]
   

   • "It's okay to be squeamish about your flu shot. Nobody likes those."
   • "Of course you're worried about asking your boss for a promotion. This sort of thing is scary for everyone."
   • "Well, no wonder you don't feel like going out today."
4. 4
   Acknowledge their personal history. You can also help by acknowledging how the person's history affects their emotions. This can be especially helpful if someone is worried they're being irrational or unreasonable. While the person may be reacting in a way that's over-the-top, you should help them understand they're still allowed to feel their feelings. Try things like the following:^[8]
   

   • "Given how Amy treated you, I totally understand why you'd want to take a break from dating. That's a lot to recover from."
   • "After that last roller coaster ride, I can see why you'd be hesitant about this one. Want to ride the merry-go-round instead?"
   • "Given you got bit by a dog last year, I can see why you're neighbor's new dog might make you nervous."

Method3

Avoiding Non-Validating Responses

1. 
   

   
   1
   Do not correct someone's thoughts. Never attempt to correct someone's thoughts or feelings, especially when they are upset. If someone is being irrational, you may be inclined to try to talk them out of it. However, this can come off as negating the person's feelings.^[9]
   

   • For example, don't say, "That's not something that's worth getting angry about." It's okay if you disagree with someone's response, but validating is not agreeing. It's simply acknowledging someone's feelings. Instead, you could say something like, "I understand why that would make you angry" or "You sound pretty mad."
2. 
   

   
   2
   Skip the unsolicited advice. Many times, when people tell you about a problem, they just want to be heard. Before opening your mouth to say "just ignore them" or "look on the bright side," stop. Listen more closely to what they are saying, and focus on sympathizing first. They need to process their emotions first.
   

   • If you want to help, first listen. After that, ask if and how you can help.
   • If you're unsure, try asking "Are you coming to me for advice, or would you just like to vent?"
3. 
   

   
   3
   Make sure to use the right type of validation. Remember, you can't always validate in every possible way. Choose the best option for validation. If you're unable to empathize personally, for example, don't try to make comparisons. Instead, offer more general forms of validation.^[10]
   

   • For example, say a friend is stressed due to a divorce. Don't try to empathize directly if you've never been divorced by bringing up a breakup you had. Instead, validate using more general terms. For example, "It's completely understandable you feel that way. Divorce is really tough on most people."
4. 
   

   
   4
   Avoid blame. Never blame someone for their feelings, especially when they're very upset. Blaming someone comes off as you telling them their feelings are not valid. Avoid types of responses such as these:^[11]
   

   • "Whining about it isn't going to make it any better. Man up and deal with it."
   • "You're overreacting."
   • "So you decided to be mad at your best friend. How's that working for you?"
5. 5
   Don't try to "hoover" their feelings. Hoovering means vacuuming up any unpleasant feelings and pretending they aren't there.^[12] Examples include:^[13]
   

   • "Oh, it's not so bad."
   • "It's not a big deal."
   • "Let's stay positive."
   • "It'll all work out in the end! Don't worry."
   • "Just toughen up."
   • "Look on the bright side."
6. 6
   Don't try to fix their feelings. Sometimes people try to make their loved ones stop hurting simply because they don't want them to be upset. While well-intended, it usually doesn't help them feel better long-term, and they may feel like it is their fault for still being unhappy after your efforts.^[14]
   

   • If you want to help, try listening to the whole story and validating their feelings along the way. Then ask how you can help or offer to brainstorm solutions.
   • If they are open to having you help brainstorm, make sure that you aren't telling them what to do. For example, instead of saying "You should let go of him," try saying "Personally, I try to let go of people who don't want to be in my life, and focus on those who matter." This lets them decide whether they want to do it your way or not.

   Adapted from https://www.wikihow.com/Validate-Someone%27s-Feelings