Glen Kunofsky: Blazing a Trail for Sale-Leasebacks
Glen Kunofsky is a veteran of the sale-leaseback industry and one of the pioneers who helped establish a bigger buyer pool for net-leased restaurant properties among private investors nearly two decades ago.
These days, he wears a lot of hats. He is the founder and CEO of the NNN Pro Group in New York City and senior director of the National Retail Group and Net Leased Properties Group at Marcus & Millichap Real Estate Investment Services. He also is the founder and principal of STNL Advisors, a consulting firm that helps companies maximize value and minimize occupancy costs within both leased and owned real estate. But his knack for identifying real estate investment opportunities dates back to his college years.
Kunofsky made his first real estate investment in 1990 when he was a freshman at Arizona State University. He bought a rental house near campus after he and his roommates were evicted from their apartment for having too many parties. He put $3,000 down, assumed the mortgage and began renting rooms to his friends.
At the time, Kunofsky was putting himself through school doing construction work. So, he shifted his focus and started buying and fixing up houses. By the time he graduated with a degree in Hotel & Restaurant Management he owned 16 rental properties. After school, he started his own construction company and grew his single- and multi-family portfolio to 110 units before selling it to move back to the East Coast with his wife in 1999.
He was looking for his next move in real estate when he recognized that most restaurant companies were selling their properties to REITs and institutional buyers. Kunofsky began to call restaurant customers who were doing transactions with institutions and telling them there was a market for their properties among smaller investors. His early successes included landing deals with multi-unit franchise operators such as Burger King and Arby’s where he helped get them better pricing and friendlier lease terms.
Kunofsky has since closed over 3,500 properties with an aggregate value of about $11 billion, including over $500 million in each of the past five years. “Our business has become much more multi-faceted,” he says. “We help to provide creative strategies to our clients that all revolve around real estate.”
STNL Advisors was created to help clients maximize value and minimize occupancy costs in both leased and owned real estate. For example, its Buy and Recast™ program effectively negotiates a buy-out on an existing short-term lease and puts a new long-term lease in place with more favorable terms, such as resetting rents to better reflect the current market rate or changing terms to help finance a remodel.
Kunofsky’s advice to restaurant operators looking to extract value from their real estate is to look at the deal holistically. So many only look at cap rate execution or the rental rate, but it’s important to understand the lease terms an operator will have to live with for 20-plus years, he says. “Some of the things that we look at, especially in the franchise restaurant space, is giving tenants flexibility.”