Sentinel Net Lease
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Why Choose Sentinel Net Lease for Commercial Investing?

Experienced investment firms respond to changes in the commercial real estate climate, shielding their investors from the effects of a changing business landscape.

But reacting to changes isn’t always enough. So, Sentinel Net Lease does more: We anticipate changes, positioning our investors to capitalize on the unique opportunities created by changes in the market.

By proactively tracking the shifting economic and demographic trends that often drive changes in commercial real estate, we can find opportunities that have the potential for higher yields for our investors before other firms jump on board.

We also monitor rapid changes in technology, income disparity, and consumer preferences — changes that can serve as a barometer as we acquire income-producing commercial real estate properties for our portfolio.

In short, we do all the heavy lifting for our investors. On the front end, we source unique properties and compile valuable investment highlights — all through a seamless process designed to generate the best returns for you. After the acquisition, our best-in-class team handles all asset and property management functions, accounting, and tax preparation.

The investor’s only job is to review the information that we have compiled and decide if our investment opportunities fit their investment objectives.

We supply comprehensive information and are available to answer any questions an investor may have. As our Chief Investment Officer, Dennis Cisterna explained “One of our primary objectives is to educate our investors on a consistent basis and in a variety of mediums to provide maximum accessibility. Our commitment is to answer every question, no matter how small, because if it is important to our investors, it is important to us.”

How Do We Do It? By Utilizing the Experience and Expertise of Our Executive Team

Today’s institutional-quality, data-driven investment analyses can explore the nuances of the commercial real estate marketplace like never before. But the value of all this data depends a lot on how it’s interpreted. That’s where Sentinel’s leadership shines.

Together, our co-founders have almost half a century of boots-on-the-ground operational and asset management experience in commercial real estate delivering strong, risk-adjusted returns.

Co-founder and Chief Executive Officer Fred Lewis

Co-founder and CEO Fred Lewis guides and oversees Sentinel Net Lease’s mission, focusing on building capital relationships and the investing platform.

Before co-founding Sentinel in 2019, Fred already had more than two decades of experience as a leader in real estate development, having founded the Dominion Group in 2002. The Dominion Group includes firms for property management, insurance, lending, and real estate development. It has acquired or financed more than 6,000 residential and commercial real estate assets with a total value of over $1.2 billion.

Fred also founded RMN Investment Holdings, Hill Crest Investments, and the Real Estate Roundtable (RIR), and serves as a director on the Bank Board of Capital Bank of Maryland and the chair of the bank’s Board Loan and Finance Committees.

Co-founder and Chief Investment Officer Dennis Cisterna

Co-founder and CIO Dennis Cisterna guides Sentinel Net Lease’s investment strategy and growth. In his real estate career, which spans more than two decades, Dennis has completed more than $3.7 billion worth of real estate transactions across the U.S. and Europe. He served as the CEO of Investability Solutions, managing director of FirstKey Lending, founded Guardian Residential, and co-founded Lafayette Communities.

Dennis has also held key roles at firms such as Johnson Capital, Lennar, and Toll Brothers and has served on the National Rental Home Council, the National Association of Home Builders, the Commercial Real Estate Development Association, and the International Council of Shopping Centers.

As a speaker at conferences across the nation, Dennis has shared his investment insights with tens of thousands of investors. He has contributed to U.S. News & World Report, previously hosted The Investability Podcast, and is a licensed real estate broker in California.

Other Key Sentinel Leaders

Andrew Broeren, Sentinel Net Lease’s COO, oversees transaction structuring and execution and day-to-day operations of the platform, along with communications with investors. During Andrew’s extensive experience at HSBC Bank in London, he structured billions of pounds in corporate debt as head of structured finance for Southern Europe and has also served as an associate director of the Standard and Poor’s Rating Agency.

Daniel Hillman, the firm’s senior vice president of research, organizes market and project level due diligence for all Sentinel investment opportunities, using a proprietary process to analyze macroeconomic, local market, and policy data.

Jamie Ricalde serves as a Senior Associate of Asset Management and Acquisitions for Sentinel. She is responsible for a variety of activities in support of new investments, from acquisition through disposition, as well as providing support on critical portfolio & firm-level initiatives.

Sentinel Net Lease’s Three Areas of Focus:

Our team’s collective experience, combined with our extensive market analysis, directs us to mission-critical, tech-focused properties through net lease investment strategies. These properties fall within three areas of focus:

Core credit-rated

These commercial properties already have profitable, long-term, credit-rated tenants with net leases scheduled to last 6 to 10 more years. We anticipate a cash-on-cash return in the high single digits/low double digits for up to a decade with the potential for higher earnings later, after the disposition of the property.

Opportunistic credit-related

Stable and profitable tenants in these properties typically have six or fewer years remaining on their leases. Since disposition of the lease will take place sooner, this classification of properties has more potential for growth in the shorter term.

Value-added core

These assets have tenants nearing the end of their net leases, offering an opportunity for higher returns in the near future. Often, these assets will get capital improvements to enhance their ability to command higher rents and thus, produce greater yields upon disposition. By their nature, these properties have more risk potential, but our selection process mitigates this potential as much as possible.

Acquisition Criteria for Sentinel Net Lease Properties

Not all investment properties meet Sentinel Net Lease’s acquisition criteria, either because of the existing tenant, the structure of the existing lease, the location, or because the property isn’t positioned to continue earning income.

The properties we select for our investment platform typically meet these standards:

For Stabilized Properties

  • Property type: We focus on office, auto, retail, and industrial properties
  • Geography: We look for properties in the nation’s top 100 metro areas, particularly in the Midwest and Southeast
  • Acquisition price: Between $10 million and $40 million
  • Return profile: In-place cap rates of 6.5% and higher
  • Lease elements: Credit-rated tenants; annual rent increases; NN and NNN preferred
  • Investment period: 4 to 10 years

For Value-add Properties

  • Property type: We focus on office, auto, retail, and industrial properties
  • Geography: We target infill and high-quality suburban areas within the top 25 metro regions
  • Acquisition price: Between $10 million and $30 million
  • Return profile: 25% or higher internal rate of return
  • Lease elements: Credit-rated tenants; annual rent increases; NN and NNN preferred
  • Investment period: 2 to 4 years

Market Selection: Putting the Pieces Together

Earning dependable monthly income in the commercial real estate market requires:

  • Analytical tools to study economic, demographic, and housing market trends block by block and neighborhood by neighborhood
  • A selection process that mitigates risk and aims for the best possibilities for future growth
  • A high level of quality asset and property management, ensuring the owner serves as a good steward of the property and maximizes long-term value.
  • A leadership team that combines decades of experience, billions of dollars in successful real estate deals, and a foundation of steadfast ethics and fiduciary responsibility

Sentinel Net Lease combines all of these elements, allowing us to acquire and manage quality income-producing properties for our platform.

While some of our analytical tools may be new, our end goal is always the same: investing in markets with strong foundations for future growth to earn dependable passive income for our investors through rental income, appreciation, and value creation.

Check out our portfolio of Sentinel Lease Properties and our Open Investment Opportunities to learn more about where we’re growing income for our investors. Or follow us on Facebook to see our acquisition process in action.

Dennis Cisterna
CategoriesInsights

An Industry Icon

How Numerous Shifts Finally Led to Career Fulfillment

If you have been to a real estate investment conference in the past 15 years, chances are you have heard Dennis Cisterna on stage speaking about everything from the history of the housing market to the future of the economy and everything in between.

He has been a leading voice in this industry since the Great Recession and his insights have made a lot of firms a lot of money over the past 20+ years.

Since the beginning of his career in 2000, Cisterna has completed more than $3.7 billion in real estate transactions in the US and Europe, but he only ended up in real estate due to a chance meeting in college.

On His Way

As an undergraduate at San Diego State University, Cisterna had his eyes set for another field entirely — politics. While interning for a mayoral candidate in San Diego, he met the campaign’s fundraising chief and was given a quick tutorial on what drives elections (money) and what many of the candidate’s largest donors had in common — real estate.

San Diego State University

Cisterna noted, “When I was in college, the most popular path to elected office was to begin your career as an attorney, but I saw the writing on the wall — your network could matter just as much as your net worth and since I wasn’t truly excited about practicing law and I had always found real estate intriguing, I made a career shift before actually starting my career.”

Cisterna was able to land an internship at real estate market research firm The Meyers Group (now Zonda), where he was mentored by some of the industry’s sharpest minds such as John Burns and Tim Sullivan. Like most in their first real job, Cisterna said he was “absolutely clueless but worked extremely hard and asked a million questions” and was offered a full-time role as an analyst a couple months before graduating college.”

After four years of writing research reports and traveling all over the country performing feasibility studies for new development projects, Cisterna wanted to make a switch to learn other aspects of the investment and development industry. He took management positions with iconic homebuilders Lennar and Toll Brothers to help expand each company’s footprint in Southern California.

Lemonade Out of Lemons

He achieved immediate success with both firms, but the housing crisis took his career on a detour he never expected. “I went from an emerging leader with a Fortune 500 company to collecting unemployment checks,” he recalled, adding that his division at Toll Brothers went from 160 employees to 16 during the Great Recession. As the world worked itself through the housing crash, Cisterna scrambled to survive in an industry he had grown to love.

Shortly after being laid off, he started an advisory firm that had him take on every type of assignment under the sun and broadened his skill set immensely. He consulted dozens of the biggest financial industry players, including several of the largest banks in the country, about how to manage their swelling book of foreclosed homes, commercial properties, and large tracts of land.

On the other side of the coin, Cisterna also advised large private equity firms and hedge funds how to capitalize on the distress in the market.

A Passion for Evolution

After making a name for himself among some of Wall Street’s biggest names, Cisterna transitioned to real estate investment banking and lending with executive positions at several firms including Johnson Capital and FirstKey, where he was recognized as a leader in bringing new equity and debt to the then burgeoning asset class.

“I found I had a great knack for raising capital and understood the momentum for SFR investing was trending in the right direction. It was pretty exciting being on the ground floor of the SFR investment space and being a major part of how the capital markets evolved.”

In 2016, he moved to Investability as the company’s Chief Revenue Officer and was selected to serve as the CEO of the company barely a year later. But he still felt unfulfilled. “I always had this vision in my mind that once I became a CEO, I would be satisfied, but achieving that left me more frustrated than I had been before. It dawned on me that even as CEO, I did not own the company. I still had a board of directors to report to, there was a corporate culture that preceded me, and it was not nearly as appealing as it seemed on the road up the corporate ladder, so I got off the ladder. It was surreal to spend nearly 20 years working towards a goal, achieving that goal, and realizing that isn’t what you really want.”

From Zero to $600 Million

With a little nudging from some industry colleagues, Cisterna did take that chance on himself. He launched his own investment firm, Guardian Residential, in 2018. The firm focuses on niche off-balance sheet financing opportunities with homebuilders.

Guardian has deployed nearly $50MM with several builders across the country. Six months later, he co-founded build-for-rent operator, Lafayette Communities, with industry veteran, Thibault Adrien. The firm is backed by private equity giant, Carlyle Group, and has more than 2,000 units either built or under development in the southeastern United States.

In late 2019, he co-founded Sentinel Net Lease with another longtime industry colleague, Fred Lewis. Sentinel acquired stable cash-flowing commercial real estate across the country. Their roster of blue-chip tenants includes Amazon, AT&T, JP Morgan, and Tesla. The firm currently owns 15 assets totaling over $225 million with an eye on crossing $500 million by the middle of 2023.

When pressed to explain the meteoric rise of his entrepreneurial efforts – Cisterna isn’t shy in his explanation.

“I’d love to tell you I am the smartest guy in the room, but it is really a combination of luck and timing. My collective experience over the past 22 years has helped me identify investment opportunities in the early stages and we’ve capitalized on that across all three platforms, but I could not have succeeded in this manner if technology and information hadn’t become accessible to an emerging investor like me.”

“So many of the innovative tools and services that were built for the largest investment firms are now available to investors of any size. As you can imagine, if I own a real estate-services company and I’m trying to grow my revenue, once I’ve captured the institutional sales I then must go downstream to the next level of investor. That trickle-down effect in products and services for real estate investors benefits every investor at every level.”

“From capital raising to data analytics to asset management, it might be the easiest time to start an investing firm in the history of the US. Of course, that doesn’t mean making the right investment decisions are easy, but the barriers to entry are now so much lower than in the past.”

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CategoriesInsights

Hunting for pandemic-proof real estate: Sentinel Net Lease not shying away from the Midwest

Los Angeles-based Sentinel Net Lease has never overlooked the Midwest, regularly investing its dollars in properties throughout the center of the country even before the COVID-19 pandemic hit. And now that the commercial real estate market has been working through the pandemic for more than a year? Sentinel still likes the affordable prices and profit potential of Midwest-based assets.
Read the full article here.

CategoriesInsights

Does a New Occupant in the White House Matter to CRE?

With a new president in the White House, many people are wondering how a new administration will impact commercial real estate. While which political party is in power doesn’t necessarily shift real estate cycles, there are some ways that various legislation and regulatory decisions can impact the market as a whole. Read more “Does a New Occupant in the White House Matter to CRE?”

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Why NNN Lease Investing, Why Now

As COVID-19 continues to negatively impact the economy, commercial real estate investing in general has been met with increased uncertainty and because of that, reduced investments. While the majority of the commercial real estate industry is taking a big hit, certain opportunities that function well in uncertain environments, notably triple net (NNN) lease investing, has become a powerful value driver in the market when paired with resilient businesses. This is a primary reason why Sentinel has focused on acquiring mission-critical, tech-focused properties through NNN investment strategies. By focusing on passive real estate investments in commercial ventures capable of operating at full capacity in the current environment, Sentinel and its investors are capturing long-term value for the foreseeable future.

Why Invest in a Triple Net Lease?

A net lease is a contractual agreement in which a lessee pays a portion or all of the taxes, insurance fees, and maintenance costs for a property in addition to rent. The tenant is expected to pay for all the costs related to a property. A triple net lease absolves the landlord of the most risk out of any net lease type. This means even maintenance and repair costs must be paid by the tenant along with rent, property taxes, and insurance premiums. Most triple net leases are long-term, lasting for more than 10 years, and generally include concessions for rent increases.

Stability

NNN leases are one of the most secure investment opportunities within commercial real estate, because triple net leased properties can provide stable and regular income each month. The rents can be secured by large corporations or franchises, making them lower risk and more reliable. This is why the tenant is important in evaluating NNN lease investments. Since tenants must commit to long-term leases, the risk of re-releasing is markedly lower compared to other lease types. Lease income can almost be thought of as a replacement for fixed income, with the additional potential upside of the sale of the property.

Passive Real Estate Investing

Sentinel sets itself apart in the real estate investing sector by capitalizing on current market conditions and positioning in the NNN lease space. As a long-term investor, Sentinel has been able to take advantage of short-term volatility to execute strategic NNN investments, focused on receiving exceptional risk-adjusted returns and generating passive real estate investing income from high-quality, recession resistant tenants.

For example, we can analyze Sentinel’s recent NNN lease investment for a Tesla Store & Service Center in the Chicago Metro Area highlights these benefits. The property is 100% occupied by Tesla, the highest valued automaker in the world and a credit rated tenant. This acquisition includes favorable terms for Sentinel with a long-term lease, a triple net lease structure in which Tesla pays all operating expenses, along with no termination, space reduction or purchase options. Investors receive regular income streams from the lease payments plus the upside of the appreciation of the asset.

This investment provides the opportunity to acquire a first-class property with a long-term lease to a strong national tenant. Following a complete renovation of the property in 2019, Tesla executed a ten-year lease that extends through 2029 (with two 5-year renewal options). The lease, which is structured with significant rental increases (9.8%) every 5 years, includes a Corporate Guarantee from Tesla, Inc.

With decades of experience in commercial real estate investing across multiple asset types and classes, Sentinel’s principals view such NNN lease investments as offering strong diversification opportunities decoupled from traditional equity and fixed income markets.

Contact our team if you are an accredited investor interested in learning more about investing in commercial real estate.

CategoriesInsights

Resilient Commercial Real Estate Investing in the Pandemic Era

The impact of COVID-19 has laid bare certain realities of commercial real estate investing, one of which is the critical importance of resiliency in the underlying business models of tenants. Investors who can adapt by properly assessing the economic outlook and re-evaluating property selection will continue to generate strong returns while maintaining a sense of certainty in the long-term, even in an uncertain environment.
Read more “Resilient Commercial Real Estate Investing in the Pandemic Era”

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Sentinel Net Lease Acquires Two Schnucks Fresh Foods Grocery Stores in Illinois

Sentinel Net Lease is proud to announce the acquisition of two Schnucks Fresh Food Grocery Stores for $18.3MM in Illinois. The first property, located in Loves Park and acquired for $11.7MM, is 142,357 sq ft and sits on 15 acres of land. The second, located in Normal and acquired for $6.6MM, is 57,000 sq ft and sits on 6 acres. These stores align directly with Sentinel’s strategy of executing opportunistic acquisitions of pandemic-resistant, mission critical real estate that has the potential to generate passive income for investors even in adverse macroeconomic scenarios.
Read more “Sentinel Net Lease Acquires Two Schnucks Fresh Foods Grocery Stores in Illinois”

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Sentinel Net Lease Acquires $16.9MM Amazon Customer Service Center in Huntington, WV

Sentinel Net Lease is proud to announce the acquisition of an Amazon Customer Service Center in Huntington, West Virginia for $16.9MM, from an affiliate of Lexington Realty Trust. The 69,000 sq. ft. property sits on 7.9 acres in Kinetic Park, the premier technology park in the greater Huntington metro area.
Read more “Sentinel Net Lease Acquires $16.9MM Amazon Customer Service Center in Huntington, WV”

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