Tyler Wilson on Interest Rates, Commercial Real Estate & Investor Demand

Wilson was the all-time passing yards leader at the University of Arkansas until surpassed by KJ Jefferson in 2023. (Jason Burt)

Please describe what Wilson Real Estate Investment Services does.

Wilson Real Estate Investment Services is a licensed real estate brokerage firm in Arkansas. Wilson focuses on developing, brokering and syndicating high-quality single-tenant net-lease opportunities across the country. We work with franchisees and national retail brands to expand their growth across the country. We also assist and try to educate other investors who are considering investing in these types of investments.

What is single-tenant net-lease development and what are its advantages to all of the parties involved?

A single-tenant net lease is a type of commercial real estate investment/development in which the investor/developer builds or invests in a prototype that fits the needs of the tenant. This is often called “build to suit.” The term or length of the lease is often a 15-20 year obligation. The advantage to this type of investment is that it gives investors a passive, hands-off, bond-like return without the historical concerns or challenges of investing in real estate. There are zero management costs or maintenance obligations. The tenant is responsible for maintaining the property. It provides the tenant a custom facility to operate their business, while not tying up their business capital in the real estate. The tenant’s capital can remain dedicated to the function of their business, allowing them to grow and scale quickly. This type of development or investment structure eliminates the largest barrier of entry for most franchisees or retailers that want to grow and expand.

How would a cut in interest rates this year impact the commercial real estate market?

A reduction in interest rates would considerably impact the commercial market. The cost of debt is a factor on every deal we underwrite. It affects the rents, equity injection, cash flow and liquidity of each asset. There is a significant amount of private capital sitting waiting for rates to adjust. While rates are still palatable at this time, many loans made on deals underwritten in the COVID era will likely need to be readjusted as the fixed terms are maturing. This will help significantly on the larger deals in the broader commercial space. While most of our buyers utilize a 1031 exchange to purchase these type assets, many still utilize debt to acquire the properties. If debt is cheaper, our projects become far more attractive and also more valuable.

What are Goddard Schools and what is your role in their development?

The Goddard School, based in Philadelphia, is one of the nation’s leading early childhood education franchises. Wilson is a preferred developer for Goddard across the country. We are partnering and working on development projects in Arkansas, Texas, Oklahoma, Arizona, Colorado and Florida. This would include managing the site selection, leases, development and construction, as well as handling the banking and financing of all projects. Many franchisees have little to no background in dealing with zoning, city requirements, and the construction complexities of completing a turn-key real estate development process. We bridge the gap not only between the potential capital limitations, but also time constraints or inexperience they may have.

Did you always have an entrepreneurial drive, or was it acquired after your football career?

I always have had a drive to win. I definitely hate to lose. I did not grow up in a household of businesspeople. My dad was in sales, so I did see and learn from that, but mostly teachers and coaches were my upbringing. At a young age I realized that if you wanted something bad enough, you needed to go work to make that a reality. It wasn’t free and it didn’t happen automatically. Honestly, I was disappointed that the phone didn’t just start ringing with opportunities when I was done playing ball. I realized quickly that you must bring value to be wanted and needed. I got up and got to work, with probably a slight chip on my shoulder. In life after football the scoreboard has just changed from touchdowns to deals. I realized that I have lots of work to do and need to build a strong business that has longevity. I can’t let these young quarterbacks today outearn me. Not that I’m keeping count or anything.