May 16, 2017

Single-Tenant Net Leased Properties

In this article you will be reading a general overview of the primary types of single-tenant net leased properties. Here you will also know about a road map of the trade-offs between property types. This is however a general outline only.

Primary Types of Single-Tenant Net Leased Properties

  1. Necessity Retail
  2. Updated Property Providers and Tenant List
  3. Fast Food Restaurants
  4. Gas Stations
  5. Vehicle Repair/Parts
  6. Casual and Budget Dining
  7. Dollar Stores/Discount Retailers
  8. Investment-Grade NNN Office
  9. Business/Communications

To corporate leases, credit ratings are applicable. This ratings date back to the spring of 2010. So there could be a change anytime soon. Proper lease structure, tenant, and location are important for building a long-term income portfolio and completing a 1031 exchange.

When seeking a tenant, make sure that the candidate is involved in the right business or industry, to make sure he or she can survive any economic downturn. In order to make pragmatic investment decisions, you have to have a valid property list. A nationwide tenant list will work as a complement to that.

Single tenant net leased properties are an opportunity to get a reliable mix of corporate-backed, stable tenants. Even during economic downturns, the medicine and food sectors are the least affected, for their necessity. So, chains selling those relevant items are out of ‘risk zone’.

The minimum lease term for net leased properties is 10 years. Corporate-backed leases, more or less, fall in this category. So, this kind of lease is the other name of stability and long-term opportunity. Moreover, the renewal term could be as far as 40 years or more. Companies like Walgreens can effectively offer lease terms with corporate credit rating, that is also no lesser than A+. The lease structure is also free of any bumps.  Altogether they make single-tenant net leased properties a lucrative investment.

About the author 

Dwaine Clarke

Dwaine is the Founder and President of NNN Deal Finder an investment real estate services firm exclusively focusing on Single and Multi-Tenant Net Lease Properties. The firm provides a full range of brokerage and advisory services nationwide to High Net worth Investors, Developers, REITs and Institutional Investment Funds. Contact Dwaine to discuss securing your next investment.

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