Triple net lease (NNN) real estate offers investors a way to secure a consistent revenue stream without having to play all the traditional roles and take on the many obligations of being a landlord. In an NNN lease, the tenant at the property will typically cover the major operational expenses of the property as part of the business expenses. These costs covered by the tenant usually include property taxes, insurance, and maintenance or upkeep on the space they’re renting for their business.
If you’re looking for your next high-reward real estate investment, especially regarding commercial properties for lease, it’s important to understand what goes into financing a triple net lease property, otherwise known as NNN financing. NNN properties for sale are leased to a single tenant who takes on additional expenses beyond the usual rent and utility payments. These additional expenses include real estate taxes, maintenance and building insurance.
A lease of this type carries benefits and drawbacks for both the lessor and lessee. Let’s take a look at what triple net, or NNN, leasing is and what it can mean for your efforts before we get into financing.
What Is a NNN Lease?
Before we can look at NNN financing, it’s important to understand what a net lease is. In this form of commercial real estate lease, the tenant takes on the burden of some or all of the normal ownership and maintenance costs of the building. They may, in addition to rent, pay some of the taxes, repair and maintenance costs, or other fees associated with the property.
In a single net lease, for example, the tenant pays property taxes. With a double net lease, the tenant pays for property taxes and insurance. The triple net lease passes on the maximum level of expenses to the lessee.
An Overview of the Triple Net Lease
When a property owner offers a triple net commercial lease, the tenant takes on the additional responsibilities of property taxes, the cost of upkeep on the building and any insurance, as well as normal rent payments. This can save the building owner a great deal of money because the lessee is responsible for the same level of expenses as the owner might normally take on.
For the lessee, the rental costs are generally less than they would be otherwise. Essentially, the building owner passes on their savings in the form of reduced leasing costs. Such leases are also popular for business owners and operators for a number of reasons:
- They tend to be for 10 or 15 years, with a controlled escalation of rent, which allows for long-term business operations.
- They allow for the tenant to make whatever repairs or upkeep are needed without reliance upon landlord cooperation.
For investors, triple net properties also carry a range of benefits:
- Investors receive a stable income over a long-term agreement.
- The property in question will presumably appreciate in value at little to no cost to the owner.
- There are no worries regarding management issues.
- There are no concerns about filling vacancies.
- Building improvement costs are nil, or close to it.
- When a triple lease investment property is sold, capital can be rolled over into a 1031 exchange to save money to take advantage of tax deferment.
Low Risk, High Reward
If you’re looking to get into a property deal that carries a very low risk for a very high reward, it’s hard to beat a NNN lease property. Again, leases range from 10 to 15 years, or even as long as 25, so there’s stability in such a property. It’s governed by a single set of agreements, which means you don’t have to negotiate raises in rent, building improvements or other costs.
Hands-Off Management for a Single Renter
Again, you’re dealing with only a single tenant with this kind of lease deal, and they’re taking on all of the responsibilities of maintaining the property. That means you can be a completely hands-off landlord, stepping in only when there’s a major problem (such as the tenant failing to uphold their end of the agreement).
Steady Income with No Surprises
You can, through your lease property, enjoy a steady income with no surprises and relatively few headaches. After all, you don’t have to be concerned with paying out insurance or taxes, let alone upkeep, repairs and maintenance. All of that is taken care of by your tenant. In some ways, it can feel like easy money. There’s no such thing, of course, but a NNN lease can feel that way once it starts moving along.
Pay for Mortgage and Financing
The goal for just about any lease property is to cover your fees related to the mortgage and financing of the property. A NNN lease is ideal for this purpose. Working with a reputable triple net advisor can offer a number of different options for financing that can fund your purpose, and your lease agreement will immediately help to pay off those monthly regular costs.
Buying a commercial real estate investment property of this sort has specific financial requirements. The investor has to have a minimum accredited net worth of $1 million. This excludes up to $200,000 in income or $300,000 if the purchasers are joint filing, or excluding the value of the filer’s primary home.
This can, of course, make it tricky for a smaller investor to take advantage of triple net lease properties. There are channels open to such smaller investors, however, including REITs, or real estate investment trusts, which are geared specifically toward NNN properties for sale. Here are a few more things you need to look for when considering financing NNN properties for sale.
Is the Tenant Credit or Non-Credit?
If your tenant holds an investment-grade rating from Fitch, Moody’s or Standard & Poor’s, or is a large publicly traded company, you’ll have a low risk when you buy the property, but you’ll also likely pay significantly more and get a far lower ROI when all is said and done.
On the other hand, a smaller independent business like a privately owned shop or restaurant is a higher risk because they’re not as financially stable. You will often, however, get the property at a lower price and get a greater return on your investment.
Get Up to Speed on Lease Agreements
When you buy net lease real estate, you’re almost always getting a property that is already occupied by a tenant. The property will come with a lease agreement. Make sure you understand how these lease agreements work. Look into the remaining lease term and any renewal options the tenant may have. Your loan will be directly related to the terms of that lease.
Put simply, for the most part the lender will offer a financing term on the NNN property for sale that is based on the remaining years. If there are five years left on the current lease, your loan term will likely be five years. If there are 10 years left, you can expect a 10-year loan. For the most part, lenders offer loans with terms of five, seven or 10 years.
Know Your Lenders
Financing NNN properties for sale usually involves either a federally insured bank or credit union, or a private lender. The best loan options usually come from federally insured institutions, which will offer the most competitive rates and the most favorable terms.
Private lenders are almost always more expensive. If, however, you’re facing a time crunch or are looking for a temporary loan financing solution, a private bridge loan can give you the time you need to negotiate a long-term lease while you seek to get better financing options from a bank or credit union.
Know Your Tenants
In the end, regardless of which institution you choose, the major factor will be as much tied to the credit rating of your tenant as it will be to your credit rating. The better your tenant’s credit rating is, the better your lease terms will be. This is largely because the lender is aware that you will be depending on the tenant’s rent and fees to pay your responsibilities to the bank. If the tenant has poor credit, that makes the sale a bad risk so finding the best NNN tenants is key.
Are triple net leases a good investment?
Absolutely, and we’re here to help you through the process. Check out our complete guide on investing in triple net properties and what to look for.
Seek Expert Advice From SIG
If you need assistance with triple net financing your best bet is to seek expert advice and guidance. You’re making a massive investment when you purchase a single tenant net lease property, and you need to carefully consider a wide range of factors. Location is as important as it is with any commercial property for sale, as is the punishment it’s taken from prior tenants and the possibility for future use.
Working with the best team of skilled and experienced advisors, like those at Sands Investment Group, can provide you with the right financing guidance and support to avoid critical mistakes and ensure that the process goes as smoothly as possible. SIG has experience and knowledge in all forms of triple net properties for sale, along with the expertise to save you a great deal of hassle and hurdles in the process.
Sands Investment Group is America’s fastest-growing net lease investment company, with over 2,200 transactions in 48 states (to the tune of $4.7 billion) since 2010. Our experienced team of net lease advisors and brokers are experts in the NNN market and can help you find your next best investment opportunity by helping you navigate all the opportunity and risk factors of every NNN property that meets your investment goals.
Want to learn more? Get in touch with an expert net lease advisor today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.
One of the biggest head-scratchers in commercial real estate leases are common area maintenance (CAM) charges or expenses. In a nutshell, common areas cost money to maintain and their upkeep is essential to the tenants that occupy the space and their customers. At the end of the year, the CAM charges are reconciled by the landlord and passed on to the tenant.
Let’s take a deeper dive into what CAM charges are, how they are calculated and managed, and who is responsible for the costs.
What Are Common Area Maintenance (CAM) Charges?
CAM charges are the costs of maintaining these common areas and are paid by tenants to landlords to help cover costs associated with overhead and operating expenses.
Tenants and landlords have different viewpoints when it comes to what should be included in the CAM section of a lease. For landlords, CAM expenses mean any and all expenses incurred by the landlord in order to maintain, repair, operate and manage the commercial property. But tenants see these common area maintenance charges in a broader sense as the upkeep of common spaces used by all tenants such as hallways, parking lots, public bathrooms, and building security.
What’s Included in CAM charges?
CAM charges depend on the property type (retail, commercial, office, industrial, etc.), tenant, type of lease (gross, modified, or net), and more. Here are some examples of typical operating expenses a landlord can incur and label as a common area maintenance charge and bill the tenant for:
- Repair and maintenance of parking lots
- Snow removal
- Trash removal
- Janitorial services
- Pest control services
- Real estate taxes
- Center signage
- Common area utilities
- HVAC maintenance, and
- Landlord’s administrative fees
The list covers a large variety of areas within the property, and depending on the space, it could have more CAM locations such as elevators, outdoor lighting, irrigation system, window washing, loading docks or delivery areas, sidewalks and driveway, renovations and other potential common area maintenance charges.
CAM charges can be hard to identify, so it’s important to ask your landlord the exact expenses included in your lease.
How Do You Calculate CAM Charges?
At the start of the year, the landlord will forecast the CAM expenses for the entire property and then divide the amount across the tenants in the building. Your percentage of CAM charges or pro-rata share will be calculated by dividing your square footage by the gross leasable area of the building. The total will be figured into your monthly operating expense so it can be paid throughout the year.
At the end of the year, the landlord will reconcile the actual CAM charges with the forecasted CAM cost and provide you with a statement. The statement will let you know if you have underpaid or overpaid, and you will either receive a credit or you will owe the difference.
For a triple net lease property owner, which we will discuss later in this article, the tenant pays for 100 percent of those charges as stated in the lease. Most of the time, NNN tenants are national franchises such as Walmart, CVS, Walgreens, Starbucks, and Family Dollar.
Can CAM Charges Be Negotiated?
Simply put, yes. But there are a few things to consider. CAM charges can be divided into two categories – controllable and uncontrollable.
- Uncontrollable expenses include things like utilities, taxes, and insurance.
- Controllable expenses are pretty much everything else listed in the previous section.
The good news is many controllable CAM expenses are negotiable depending on how efficiently the space is being managed. However, the property tax and insurance costs are not negotiable and fall under the uncontrollable category.
This is where having a good tenant representation broker is a must. The broker is often able to negotiate a cap on the percent that a landlord can increase the common area maintenance charges year-over-year.
There are two types of CAM caps – cumulative or non-cumulative.
Cumulative caps are preferred by landlords as it gives them the most flexibility in choosing what CAM charges will benefit their property.
For example, if the landlord and tenant agree to a 3 percent cumulative cap, and CAM expenses increase by 2 percent in the first year, then the tenant would pay the 2 percent increase. If CAM expenses increase by 4 percent in the second year, then the tenant would pay a 4 percent increase. This is because, in addition to the 3 percent cap, the landlord can recover the 1 percent increase that went unused in the first year.
Non-Cumulative caps are preferred by tenants as it allows them to budget and does not allow the landlord to recover any unused increases from the prior years. For example, if the landlord and tenant agree to a 3 percent non-cumulative cap, and the CAM expenses increase by 2 percent in the first year, then the tenant would pay the 2 percent increase. If the CAM expenses increase by 4 percent in the second year, then the tenant would pay for only the 3 percent increase.
Types of Leases For CAM Charges
There are several lease types and this can change up how CAM charges are written into the lease. Here are some of the common lease types and how operating and CAM costs are allocated.
Gross Lease: In a gross lease, the property owner is financially responsible for the building, and covers all the expenses associated with its operation (including taxes, insurance, and maintenance). To help recoup some of these costs, the property owner builds them into the monthly rent amount that a tenant pays for use of the building. The property owner pays all of the expenses associated with the building, in exchange for a monthly, all-inclusive rent sum.
Modified Gross Lease: In a modified gross lease, the tenant is responsible for some (but not all) of the operating expenses of the property but they still get to pay them as part of one monthly rent amount.
Net Lease or NNN lease: In a triple net lease, the tenant absorbs all of the operating expenses and property costs into their own business in addition to monthly rent payments, such as property taxes, insurance premium, maintenance, repairs and upkeep
Which Investment is Best When Dealing With CAM Charges?
NNN properties provide investors with a relatively low-risk (and very low touch) option for creating a consistent, long-term revenue stream.
Triple net properties are attractive to many investors because they offer reliable returns over time, with little to no landlord duties since the tenant is typically responsible for costs and responsibilities of successfully operating their business in the location. Triple net investments are also a great way to build equity and add diversity to an investment portfolio. As such, we’re seeing many investors looking to switch from high-touch property types (such as apartment complexes) to low-touch, consistent return NNN properties to add a line of passive income aligned with their investment strategies.
To sum up, a triple net investment is often considered a gold mine investment for those who don’t have the time to deal with property issues, want to avoid CAM charges, and filing property taxes, etc. But not all net lease properties offer the same type of investment opportunity. If you’re considering NNN investing, you should understand all the nuances of this type of real estate, so you choose the best option for your portfolio and overall investment goals.
Why It’s Important to Understand CAM Charges
Unfortunately, there’s no widespread agreement on what exactly CAM charges may include. And, the common area costs included in CAM charges section of a lease can vary from market to market and from one landlord to another.
For tenants, there are some strategies that you and your tenant representative broker can do to protect you from arbitrary CAM charges.
- Research other buildings in the area and see how comparable their CAM charges are to the market
- Ask the landlord for a CAM history
- Negotiate the terms of your CAM
Understanding CAM charges is one of the most difficult parts of negotiating a lease. CAM charges have a significant impact on the property’s NOI and the amount the tenant will pay to occupy the space. This is why it’s very important for CAM charges to be clearly defined in the lease before signing.
Sands Investment Group is America’s fastest growing net lease investment company, with over 2,200 transactions in 48 states (to the tune of $4.7 Billion) since 2010. Our experienced team of net lease advisors and brokers are experts in the NNN market and can help you find your next best investment opportunity by helping you navigate through all the opportunity and risk factors of every NNN property that meets your investment goals.
Want to learn more? Get in touch with an expert net lease advisor today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.
The COVID-19 pandemic has created sudden change in the economy and is certainly having an impact on commercial real estate buying, selling, and financing. The lending environment itself has tightened up considerably, making it much more difficult to obtain and secure financing. Banks are overloaded with the PPE program and timelines are extending, making it difficult to stay agile and move quickly when an investment opportunity does become available in the market.
As a result, many operators are looking into their existing portfolios and trying to identify opportunities to leverage equity and raise cash to move on new opportunities, make property improvements, or strengthen their cash position for operations. At Sands Investment Group (SIG), one of the strategies we are using to create capital and leverage opportunities in the current economic state is sale leasebacks.
A sale leaseback is a financial strategy in which a property owner sells their commercial property and retains a long-term lease with anywhere between 40-50 years of control. This option can create capital necessary to move on other new business opportunities, reduce bad debt and costs, and potentially reduce the overall occupancy cost for the business.
Here are three ways Sands Investment Group is using sale leasebacks to help operators weather the current financial situation brought about by the COVID-19 pandemic and come out the other side stronger than ever.
1. Get rid of bad debt and trade it for reasonable landlords.
In the current economy, banks have become more rigid in their lending and financing practices, which is causing undue pressure on investors who need the flexibility to move quickly when a commercial real estate investment opportunity becomes available in the market.
A sale leaseback provides you with the opportunity to reduce debt loads by selling a property while staying on as a tenant with a fixed lease payment. This allows you to retain your initial capital investment in the property. This option can also provide more operating capital for your business and provide a more favorable, humanized landlord-tenant relationship.
2. Identify ways to reduce occupancy costs.
At SIG, we are finding that principal and interest payments on highly leveraged assets are commonly held for a higher monthly payment than a rolled or fixed cost at today’s CAP rates. Additionally, in a sale leaseback—as an operator—you will be able to both recoup your initial down payment and pay off all debts.
In uncertain times like these (where every penny counts), SIG is looking for ways to forecast post-COVID sales for businesses. We’re also looking for every possible way to reduce overall occupancy cost of real estate and stack up the war chest so we not only have a runway to operate the business, but make sure funds are available for post-COVID opportunities.
3. Raise capital for future buying opportunities.
Most of the deals on the table today are prompted by quick fixes and the ability to come to the table with cash, and for most of us, that cash is sitting in our existing real estate investments. A sale leaseback strategy provides necessary capital for future investments or buying opportunities.
The common sentiment in the market is that this disruption is going to turn into opportunities. In this way, COVID-19 has accelerated selling or retiring from the business, creating opportunities for investors who are looking to expand.
Overall, SIG is providing a capital solution to fund portfolio acquisitions and growth opportunities as they arise.
About Sands Investment Group
Sands Investment Group has extensive experience in all types of commercial real estate and is an industry leader in the net lease investment space. We can help you navigate and advise you on how to leverage your existing assets in the current economic climate and create capital to fund your future investments.
With over 2,200 transactions in 48 states worth $4.7 billion since 2010, Sands Investment Group is the fastest growing net lease investment company in America. We provide highly personalized client services, employ innovative marketing techniques, and have access to an extensive network of investors to help you find the perfect investment or sell a property you own for the best profit.
Want to learn more sale leasebacks and other investment opportunities that don’t require you take on any more debt? Get in touch with an expert today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.
NNN properties can be quite lucrative for investors who are looking for a long-term, low-touch, and high-return investment property. Triple net lease property investments are a low-risk way to build equity and gain a consistent investment revenue stream, but as with any commercial real estate transaction, there is a specific process that must unfold successfully for an NNN property transaction to be completed.
Why are triple net leases a good investment? Because single-tenant triple net (NNN) properties can provide some of the most reliable income streams in the commercial real estate investment industry. Period.
NNN properties provide investors with a relatively low-risk (and very low touch) option for creating a consistent, long-term revenue stream. In a triple net lease, the tenant pays an agreed upon, monthly rental amount in addition to covering a majority of operational costs associated with the property, such as: annual property taxes, insurance, and maintenance costs.
Triple net lease (NNN) properties are often very attractive to investors who are seeking out an investment with consistent, equity-building returns without having to be involved in the day-to-day obligations and financial responsibilities of the property. NNN leases are also structured over a long period of time (usually anywhere from 10-25 years) so they can be an opportunity for consistent, long-term earning potential from the investment standpoint.
Investing in commercial real estate can bring about many advantages in the form of low-touch income or a diversified portfolio. But not all commercial leases are the same, and even leases of the same type can have varying factors and deal details. In short, every commercial lease is usually as unique as the property itself, so it’s very important that you understand all the particulars and fine print of any property you’re considering adding to your portfolio.
1031 exchange real estate can present great opportunities for investors who want to move seamlessly from one property to another, while obtaining tax benefits on sale proceeds that provide them with more capital to put into a new property.
However, in order to get all the tax benefits of a 1031 exchange, a deal must meet specific parameters and a specific set of rules and timelines must be met throughout the entire process and the necessary transactions.
You can consider this guide the CliffsNotes for 1031 exchanges or a 1031 exchange for Dummies handbook, which will provide an overview of 1031 exchanges and explain all the rules, eligibilities, and timeframes that you need to know if you’re considering changing or upgrading the properties in your investment portfolio.
What is a 1031 Exchange?
A 1031 exchange is the commercial real estate investment term derived from the Internal Revenue Code (IRC), section 1031, which states, “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.”
Essentially, 1031 exchange properties allows an investor to sell a property and then use tax-free profits from that sale toward the purchase of another investment property that is of similar value (or greater).
A 1031 exchange can be extremely advantageous for investors who are looking to diversify their portfolio with a more profitable property type or move into a different, more passive type of investment.
For example, at Sands Investment Group, we’re seeing a shift in investment strategy that leverages the 1031 exchange. Many of our buyers are investors who are looking to sell an existing, high-touch investment property (such as an apartment complex) and use the tax free proceeds of a 1031 exchange to invest in a triple net (NNN) lease property that provides conservative, consistent returns, but doesn’t require landlord duties or heavy owner involvement. NNN lease properties offer a more passive income stream, and we’re seeing more and more investors opt for this route via the 1031 tax deferred exchange deal.
1031 Exchange Guidelines
A 1031 exchange can be an ideal solution for an investor who wants to move quickly out of one investment property and into another, without having to worry about taxed capital gains or paying income taxes on the sale of an existing investment property.
Along with the tax deferral opportunity inherent in the 1031 exchange comes a set of very specific rules, regulations, and timelines that must be adhered to in order to qualify for this type of deal and reap the full benefits.
We’ll now discuss those important 1031 exchange rules, timelines, and other factors influencing this type of investment.
Like Kind Exchange Properties
In order to pursue a 1031 exchange, both the existing property being sold and the new one being purchased in the deal must meet like-kind property requirements. The like-kind rule doesn’t necessarily apply to the quality of the properties, but dictates that properties exchanged must be similar in value and type and fall into the classification of “real property.”
The two properties must also be used for investment or income purposes, and cannot be for personal use. To achieve full 1031 exchange benefits, it’s also best if the property being purchased is of equal or greater value of the property being sold.
The price difference between properties in a 1031 exchange is known as a “cash boot.” If the new property being purchased in the exchange is less than the existing property that was sold, the price difference is taxable. So it’s advantageous for investors to find a replacement property as close in value to their existing one as possible, to fully take advantage of the 1031 tax exchange benefits.
Like-kind property types apply only to “real property” including land, commercial buildings, residential buildings, but no other types of assets can be used in the exchange. For example, an investor can exchange a piece of commercial land for a vacant lot, or they can sell an apartment complex for a tenant-occupied business property. However, a piece of land or an investment property cannot be exchanged for stocks or other non-property type assets in an exchange.
Transaction Expenses: What’s Covered by 1031 Exchange Funds (and What’s Not?)
Some expenses related to a 1031 exchange transaction can be covered with funds in the deal, but there are other expenses that aren’t included.
Costs that can be covered by 1031 exchange funds:
- Broker commission
- Legal and tax advisor fees associated to the deal
- Filing fees
- Title insurance
- Finder fees
- Escrow fees
Costs not covered by 1031 exchange funds:
- Insurance premiums
- Property taxes
- Repairs or maintenance
1031 Exchange Timeline
A very strict and specific set of 1031 exchange time limits and deadlines must be adhered to over the course of any 1031 exchange deal.
Here’s a basic timeline of how a 1031 exchange timeline unfolds.
- The investor sells their existing property.
- The funds from that sale are transferred to a qualified intermediary to hold in escrow for the next sale.
- Upon the sale of their existing property, the investor has 45 days from the sale date to identify the new property they want to buy in the exchange, and make an offer.
- The intermediary will transfer funds for the purchase of the new property upon accepted offer.
- The 1031 exchange deal must be finalized and close within 180 days of the sale date of the first property.
Timeline Specifics for Identifying a New Property in a 1031 Exchange
As noted above in our timeline of a 1031 exchange, an investor has 45 days (from the sale date of their existing property) to identify the property they would like to purchase in the exchange. There are a few different distinctions on identifying properties that are important to know when scoping out new investment properties.
An investor needs to look for a replacement property according to these guidelines:
- Three-Property Rule: The three-property rule allows an investor to identify up to 3 properties that they’ll potentially purchase in the 1031 exchange. The market value of the 3 properties isn’t held to any restrictions in this rule.
- 200% Rule: The 200% rule says that an investor can choose as many potential replacement properties as they like, so long as the cumulative value does not go over 200% of the existing property being sold.
- 95% Rule: The 95% rule states that an investor can identify as many potential properties as they want, as long as they can be acquired at 95% valuation or more.
Qualified 1031 Exchange Intermediaries
A key component of a 1031 exchange is working with a qualified, reputable intermediary. As outlined in the timeline above, the intermediary will play an integral role in moving and holding funds securely so that capital can be moved from the sale of one property into the investment of another without any tax implications.
In the sale of a property, proceeds from that sale remain taxable unless they’re passed through an intermediary. The funds cannot be disbursed directly to the seller and be eligible for the tax breaks outlined in a 1031 exchange.
An effective 1031 exchange intermediary oversees all the transactions involved in a 1031 exchange. They need to be able to hold funds in escrow for the sale of first property, and keep them there until it’s time to send funds over for the purchase of the replacement property. The intermediary needs to be a partial third-party, and should not have any formal relationship with anyone involved in the transaction other than facilitation.
What is a Reverse 1031 Exchange?
You may be wondering, “What if I want to purchase a new property before selling my existing investment property? Is the 1031 exchange still a viable option?”
The answer is yes, you can with a Reverse 1031 exchange. However, like with a traditional 1031 exchange, there are some rules you need to consider.
In a Reverse 1031 exchange, an investor can purchase a new property first, but that property must be held by a qualified intermediary until the other property sells. The existing property must be sold within 45 days of the purchase date of the new property, and the deal must be finalized and closed within 180 days of the purchase date.
1031 Exchange Companies
A 1031 exchange can be an advantageous way to transition into a new investment strategy or diversify your portfolio while also benefiting from the tax deferral that helps move more of the sale proceeds into the new property purchase. But the process is intricate and driven by very strict rules that must be met in order to benefit from the tax cut in a 1031 exchange. It’s not a process you want to go into alone or unprepared.
As such, it’s best to approach the 1031 exchange process with the help of skilled professionals who understand the market, know exactly how to move 1031 exchange transactions along smoothly, and can act as trusted advisors during the whole process.
Sands Investment Group has extensive 1031 exchange experience, and can help you navigate all the rules to ensure you make the best choices and obtain the full benefits of the deal. Our client-focused approach, extensive connections, and marketing expertise are just a few of the ways we’re leading the industry. In fact, we’re the fastest growing net lease investment company in America, with over 1,900 transactions in 48 states (to the tune of $4.5 Billion) since 2010.
Want to learn more? Get in touch with an expert today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.
More and more savvy investors are choosing to add NNN properties to their portfolios. But, why are investors flocking to triple net investments?
Very broadly, NNN lease properties present a relatively low-risk, low-touch investment that provide consistent, dependable returns (with none of the extensive landlord duties that come along with other types of investment properties).
However, to find the best NNN investment opportunities that will bring you the full rewards and potential, you need to locate the properties with the most advantages and the best tenants.
Triple net lease real estate offers both investors and tenants many unique opportunities and benefits, but there are also limitations that don’t necessarily outweigh the rewards of this type of commercial lease, but are important items both parties must consider before deciding if a triple net lease is the best option to fulfilling their goals.
Investing in triple net lease real estate is a great way to diversify your portfolio, create an income stream, and build equity all at the same time. NNN properties typically have great locations with good traffic and strong, proximal businesses in the area. This lease type also comes with a long-term, qualified business tenant in place to ensure the longevity of your investment.
Triple net lease real estate is popular among investors who want to add a consistent revenue stream to their portfolio through monthly rent payments from tenants. A key advantage in a triple net lease is that a tenant usually takes on the majority of operating costs on the property, which makes it a low-risk and low-touch investment for a property owner, with stable income each month.
Triple net real estate is very beneficial to investors who are looking for a relatively low-risk investment (with little to no involvement as a landlord) that provides solid, predictable returns over the long-term.
NNN locations tied to established brands like Starbucks can be especially coveted in net lease real estate because they typically come with a recognizable brand, premium locations, and the potential for growing returns as the property owner. Read more
Net lease real estate is attractive for conservative investors who are looking for long-term profits and benefits from their investment in a property. In addition to net lease opportunities on existing structures, there is another avenue of revenue you can explore for your portfolio-ground leases. Read more
Net lease real estate offers an array of benefits for investors who are looking for a stable source of income, without the bulk of expenses and landlord duties that come along with property ownership. In a triple net lease, the tenant assumes the majority of expenses associated to the property (in addition to monthly triple net rent) where they’ll operate their business, such as:
- Maintenance and Repairs
An industrial gross lease (also called a modified gross lease in some markets) is a type of commercial real estate contract that is often used to create a mutually beneficial deal between the property owner and the tenant on an industrial or warehouse property. In an industrial gross lease, the tenant is responsible for some (but not all) of the operating expenses of the property, which they pay to the property owner in addition to their agreed upon monthly rent.
Triple net lease real estate is popular for investors who want to add a low-risk, low-touch property that brings in consistent revenue each month over a long-term period. In a triple net (or NNN) lease, 3 important financial responsibilities (each represented by “N”) are typically included and outlined it the contract:
- Insurance Premiums
- Maintenance, Repairs and Upkeep
But each deal is as unique as the property itself, so it’s important to know these three aspects of NNN expenses (from the standpoint of an investor and a tenant) to make sure you choose the best investment for your portfolio. Read more
Net lease real estate is rich in opportunity for both property owners (who can obtain a steady income steam on their investment) and the tenants (who occupy a space where they run their business). There are different variations of net lease deals, in which the tenant and the property owner will each have different financial responsibilities for the property. These various net lease deal types typically fall into one of three categories, which, in order of popularity, are: Triple Net (NNN) Lease, Double Net Lease, and Single Net Lease.