CRE News 12.30.17


What Does the Decline in Hunting Mean for Recreational Land Real Estate?

There’s nothing quite like hunting; the rush of adrenaline when you hit your target, teaching little ones how to spot a deer, and spending time in the great outdoors. Hunting also has surprising benefits for the environment. Hunting licenses and fees are the main source of income for wildlife agencies, and hunting can prevent overpopulation.

However, there has been a significant decrease in hunting over the years. Over the last five years, the number of hunters has decreased by 15 percent. What does this mean for recreational real estate and the future of hunting?

One of the biggest reasons for the decline in hunting is our country’s changing landscape. With the human population growing every day, prime land real estate started going towards building homes and stores instead of hunting grounds. Many old hunting spots that families have loved for generations have closed and been replaced by a mall.

Another reason that less people are hunting is the cost. The rising price of ammunition, licenses, and permits are driving away hunters who can’t afford the price hike. As you can see from this chart from, the cost of hunting licenses is massive for non-residents. $250 license fees are pricing some people out of the sport. Even local license costs are skyrocketing. The Kentucky Fish and Wildlife Commission has proposed a fee increase that will raise resident license prices from $7 to a whopping $27. That’s a 26 percent increase!

Millennials haven’t been picking up the sport as much as other generations have. The biggest deterrent is that they don’t have anyone to teach them. “You don’t just get up and go hunting one day- your father or father-type figure has to have hunted,” says Mark Damian Duda, an executive director of the research firm Responsive Management. Hunting is a sport which requires a lot of teaching and expertise. With a growing number of Baby Boomers and Gen Xers hanging up their hunting vests, Millennials are left without anyone to introduce them to the sport.

There are a lot of downsides to the decrease in hunting. The group that suffers most from the lack of hunting is, surprisingly, the environment. Hunting can prevent over-population, which can wreck an ecosystem and leave animals starving as they compete for food. Hunting fees and licenses are the main source of income for many wildlife preserves and recreational land real estate. This income pays the employees, maintains the grounds, and funds projects to help the wildlife. Without this income, many parks are struggling to pay their bills.

Does the decreasing number of hunters mean the end for the sport? Not at all. There is still a very active hunting community and positive trends that show hunting increases in certain states. The same study that showed overall hunters decreasing also showed a 9 percent increase in hunting participation from 2006 to 2011. The number of paid hunting license holders has actually increased in certain states. In Texas, the number has jumped from 1,060,455 license holders in 2015 to 1,148,765 in 2017.

The local food movement has also helped the hunting community. With a focus on shopping local and knowing where your food comes from, this movement has introduced people to hunting as a fun and sustainable way to get your dinner.

Recreational land real estate is still going. In last year’s RLI survey, sales of recreational land actually increased. Recreational and residential land real estate sales accounted for 50 percent. While interest in the sport may waver, prices per acre of land real estate remain high. The average price for hunting land real estate in the Midwest is $2,975 per acre.

While hunting is experiencing a dip in popularity, there are still many loyal fans of hunting who want to bring it back into popularity. There have been efforts by local governments to make hunting affordable and accessible again. Ryan Zinke, the United States Secretary of Interior issued orders to overturn a ban of lead ammunition and issued an order to increase hunters’ access to public land. In the community, many youth groups are teaching young people about hunting and nature. The Florida Fish and Wildlife Conservation Commission launched the Youth Hunting Program of Florida to teach young people how to hunt safety.

Hunting is going through some changes. Most of them are positive. A new movement and generation are learning about the benefits of hunting and how it can help the environment. Local government are now realizing the effects of price hikes on hunting and are taking steps to change it. With a new focus on sustainability and teaching the next generation, hunting is sure to remain a classic American pastime. (RLI)

Knowing The Right Time To Sell

Google the term “buying a triple net asset,” and you’ll see plenty of how-to articles on the topic.

However, that information seems to be lacking when it comes to selling a NNN property, which is too bad. The success of an investment isn’t only pinpointing the right time to buy, but understanding the right time to sell.

The first issue to consider is exit strategy, something that should be in place when the NNN asset is first acquired. An exit strategy means staying the course, even if demand or market conditions fluctuate over the short term.

However, let’s say that it’s time to execute that exit strategy. Is it still a good time to sell? Possibly, under the following conditions.

New lease, or long-term lease renewal. If the NNN property tenant just signed or renewed a long-term lease (10 years or longer), investors will likely regard the asset more favorably.

Upgrades. Newer is better, especially when it comes to single tenant, NNN assets. The value of the building and property increases when you and/or the tenant spruce it up. The value also increases as the tenant upgrades to its franchisor’s latest model.

Tenant industry. In the aftermath of the Great Recession, triple net-leased dollar stores were good investments, because they were in demand; everyone wanted to save money. Industry trends can show when it’s time to sell.

Improved infrastructure. Is it easier for customers to get to the tenant because of an improved road, new traffic signal or an upgraded sidewalk? More traffic means more sales, with more sales meaning better investment value.

Needless to say, it’s important to check with a financial professional or attorney before buying or selling any kind of investment. Just as important is keeping an eye on the indicators demonstrating that the time might be right to dispose of a NNN property. (Globe Street)

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