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Tenant Profile: Sherwin Williams

January 16, 2018

 

 

Founded in 1866 by Henry Sherwin and Edward Williams, The Sherwin-Williams Company has grown to be not only the largest producer of paints and coating in the United States but also the world making it a very attractive net lease asset for those investors that are seeking to acquire a credit worthy tenant at a lower price point.  Though not an absolute NNN lease as most are NN, Sherwin-Williams assets allow for investors to add a stable tenant to their investment portfolio at a reason price for the type of credit they are receiving.  Although Sherwin-Williams leases typically are only 10-year terms, they generally offer nice bumps during their options – some up to 10% per option.

 

Sherwin- Williams are usually located in desirable locations such as shopping malls, mini-malls as well as free standing locations all of which are strategically selected to allow for ease of customer access.  Though the land that they sit on tends to be smaller then other tenants, the locations tend to be very “re-usable” due to their high profile/visibility locations.  Furthermore, the smaller land size typically translates to lower rents, which therefore leads to lower price points for investors.

 

Sherwin-Williams is certainly a tenant that investors should be considering adding to their portfolios whether they currently own any of these assets or not.  They offer an investor an asset with a lease that usually includes increases, they are investment grade with corporate guarantees and still relatively cheap to acquire.  The shorter leases (typically 10-years) as well as the fact that many are NN, should certainly be offset by all that Sherwin-Williams offers to those who acquire their assets.

 

http://www.sherwin-williams.com/about/index.jsp

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