Net Lease Properties

Net Lease Properties

There are two kinds of net lease properties, both are actually “Triple Net” investments (NNN.) Triple net lease real estate is popular among commercial investors looking for properties with low-risk and high reward, with minimal maintenance required for the tenant OR the property.

The first group is Single Tenant Net Lease

These are almost always freestanding business locations with just one tenant occupying the entire space. This type of property has become a more popular investment choice as malls continue to lose their popularity.

It’s a very attractive investment because you’re dealing with just one property and one long-term tenant (of anywhere from 10 to 25 years depending on the lease), plus only one set of agreements between you and the tenant.

Single tenant, net leased properties are the best investments and the CAP rate is determined by the length of lease left. As time goes by the years left on the lease lessen and the CAP rate goes up

The threshold is 5 years, any property with 5+ years left on the lease has a lower CAP rate and a higher price but as years go by the CAP rate increases and the price of the property goes down.

If you have any questions about net lease investments or what you can expect from us, don’t hesitate to ask. We are here to help you reach your goals.

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The second group is Multi-tenant

Properties with triple net leases, which are more complicated simply because you’ll be dealing with multiple tenants who will potentially all have different terms (and timeframes) outlined in their leases.

Either type of arrangements has benefits:

Monthly Rent Payments to Offset Mortgage and Financing Fees

Financing a triple net property can be a great investment, even if you don’t have the liquidity to pay the full purchase amount in cash. There are many financing options from partial to full funding of your NNN property purchase.

These financing options help expand your ability to invest options as you consider triple net properties for sale, and if there’s an existing tenant agreement in place, you’ll be able to immediately begin offsetting your financing costs with monthly rent from your tenant.

Tenant Expense Pass-Throughs

When you have a triple-net lease, YOU collect rent and pass along expenses associated with the building (normally be an owner’s responsibility) to the tenant. The tenant is then responsible for paying taxes, insurance,

Virtually NO responsibilities to tenants

Because the tenant takes on all the operating costs, taxes, and maintenance fees as part of their business costs, you have almost no need to worry about the upkeep of the building. 

Get Expert Advice and Guidance from PRI

Purchasing a net lease property can be a large investment, so you need to take pains when you’re thinking of buying a property of this type -you have to qualify the type of business property AND its location to be sure you have something attractive to long-term tenants.

Working with PRI means that you have experienced support and guidance every step of the way. We are knowledgeable about all types of triple net leases (including single tenant net leases) and have the expertise to guide you through the process of finding and financing your next best investment.

Summary

Single tenant, net leased properties are the best investments and the CAP rate is determined by the length of
the lease remaining. As time goes by the years left on the lease lessen and the CAP rate goes up.

The threshold is 5 years, any property with 5+ years left on the lease has a lower CAP rate and a higher price but as years go by the CAP rate increases and the price of the property goes down.

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