What cities have the best NNN lease investment opportunities?
Some of the areas that are deemed high-growth in the NNN lease market currently are:
- Texas (Austin and San Antonio)
- Idaho (Boise)
- Utah (Salt Lake City)
- Oregon (Portland)
- Washington (Seattle)
- California Metro Area
What types of businesses can operate in a NNN lease location?
The type of business that will operate in a NNN lease location plays a large role in the long-term longevity of your investment. You’ll always want to ensure that you have a reliable tenant with a strong business background in any NNN lease you sign, but there are also certain business types that will consistently do well despite the economy, including:
- Grocery Stores
- Convenience Stores
- Drug Stores
- Discount or Dollar Stores
- Medical Clinics
What are the benefits of a NNN lease?
Triple net leases also offer property owners some other key advantages, like:
- Long-term, trusted tenants who are invested in success
- Little to no management, oversight, or “landlord duties” or property expenses
- Investment stability
- Equity building
- Asset flexibility
What is a triple net lease?
A triple net commercial lease, also known as a NNN lease, is an agreement between a property owner and a tenant where the tenant absorbs all the costs and expenses for the property, including:
- Monthly Rental Fees for the Building or Space
- Property Taxes
- Insurance Premiums
- All Maintenance, Upkeep, and Repairs
What is a double net lease?
A double net lease is an agreement between a property owner and a tenant, in which the tenant is responsible for paying property taxes and insurance premiums and deductibles on the building, in addition to their monthly rent. The property owner acts as a landlord and is responsible for handling all the building upkeep and maintenance costs to keep the property functional and operating.
What is a single net lease?
A single net lease requires that the tenant assume the property taxes on the building, in addition to an agreed upon amount of monthly rent. Single net leases are less common, and oftentimes, the property owner will collect the tax amount and handle the payment themselves to ensure it’s handled in full and on time. Single net leases do not pass along any other expenses, so the owner becomes a landlord and must also handle all expenses and maintenance for the property.
What is a modified net lease?
A modified net lease is a deal variation or compromise that usually falls somewhere between the terms of a gross lease and a triple net lease. Each modified net lease contract is unique to the property, but there is generally a split of financial responsibilities between the property owner and the tenant to make the deal beneficial on both sides.
What is a ground lease?
A ground lease is an agreement between a landowner and a tenant, in which the tenant leases land for a new build. The lessee is the owner of the building only, and is responsible for all the expenses and costs associated to constructing and maintaining a business location on a leased piece of land. The landowner, however, is typically still responsible for the property taxes on the land itself each year. NNN ground leases are usually very long-term (lasting anywhere between 50 and 99 years), but if the tenant ever defaults or the term of the lease expires, then the landowner will take over ownership of the building on their land as well.
What is a gross lease?
A gross lease contract, on the other hand, is structured so that the property owner maintains the property and takes on all the financial obligations of their investment, including taxes, insurance, and property repairs or improvements. In a gross lease, the tenant pays one monthly rent sum, which the property owner uses to help cover some to all of their costs.
What is a modified gross lease?
A modified gross lease falls somewhere in between the terms of a gross lease and a triple net 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. Modified gross leases are commonly in place on office buildings or other stand-alone buildings.
What is an industrial gross lease?
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.
What is an absolute NNN lease?
An absolute NNN lease, also known as a bondable lease, is an agreement between a commercial property owner and a tenant in which the tenant is responsible for not only monthly rent of the building, but also all the expenses of that property as well. Absolute NNN leases hold the tenant responsible for:
- Monthly Rent
- Insurance Premiums
- Property Taxes
- Building Maintenance and Repairs (Including the structure and roof)
What is an absolute NNN ground lease?
An absolute NNN ground lease is an agreement between a landowner and a tenant, in which the tenant leases land for a new build. The lessee is the owner of the building only, and is responsible for all the expenses and costs associated to constructing and maintaining a business location on a leased piece of land. The landowner, however, is typically still responsible for the property taxes on the land itself each year.
Absolute NNN ground leases are usually very long-term (lasting anywhere between 50 and 99 years), but if the tenant ever defaults or the term of the lease expires, then the landowner will take over ownership of the building on their land as well.
What is a net lease advisor?
A net lease advisor is a professional who specializes in net lease properties, and has a solid success record of guiding investors in the selection of profitable, long-term NNN investments. Net lease advisors understand the industry intimately and are up to date on all the trends driving the most lucrative deals in the market. An experienced net lease advisor can help you find and qualify triple net listings that align with your investment strategy and also assist you with financing and net lease negotiations on the property you choose for your portfolio.
Net lease advisors offer a variety of different services that can be tailored to your investment goals, which include (but are not limited to):
- Property Evaluations
- Portfolio Analysis
- Strategic Advice and Recommendations
Are NNN properties good investments?
NNN properties are great for investors who are looking for a conservative, low-touch investment with consistent returns over a long period of time. Many investors are using NNN properties as a strategy to move away from a management-intensive investment (like apartment complexes) and add properties to their portfolio that are easy to manage and provide good income and equity opportunities over the lifetime of a lease (or however long an investor wants to use the property for equity building, which is usually two years in most cases).
Which NNN property repairs are the owner’s responsibility?
As the triple net property owner (unless otherwise specified in the NNN lease), you’ll generally be responsible for maintaining and repairing these 3 main aspects of your building:
- Roof (repairs, maintenance, upgrades)
- Exterior Walls
- Utility Repairs and Upkeep (for major things such as plumbing and electricity)
Which NNN property operating costs are passed through to tenants?
One of the key advantages for triple net property investors is that you can pass along building upkeep duties and expenses to the tenants who will be occupying and running their business from your building location. These expenses and responsibilities often fall under tenant responsibilities in NNN leases as costs of operation for the business.
In a triple net lease, operating costs, maintenance fees, and improvement responsibilities are typically passed along to a tenant operating their business in the commercial space, including (but not limited to):
- Security Improvements or Systems
- Major Building Improvements (Less Capital Improvement Expenditures)
- Janitorial Services and Expenses
- Association Fees
- Building Management Fees
- Parking Lot Maintenance (Upkeep, Repairs, Re-Paving)
- Inspection Fees
What does the tenant pay in a NNN lease?
Net lease real estate is popular for both landlords and renters alike, but in exchange for using a triple net property as an established place of business, tenants often absorb most of the expenses associated to the building upkeep, including:
- Monthly Rent
- Property Taxes
- Maintenance Fees
- Utilities and Fees
What does the landlord pay in a NNN lease?
NNN properties do typically come with some expenses that fall under your responsibility as the landlord, including:
- Property Mortgage
More information about triple net owner responsibilities
Can you help with 1031 exchanges?
Yes, we can most certainly help with your exchange. The vast majority of our clients choose to do a 1031exchange when they sell their investment property. We have successfully completed hundreds of exchanges, and we would be delighted to assist you.
I want to find out what my property is worth, can you help me with that?
We are pleased to offer free pricing evaluations with quick turn-around. Our detailed pricing analysis includes on market data, recently sold data, area overviews and much more to give you a comprehensive value of your investment asset in today’s market.
I’m looking to buy a triple net but don’t know where to start?
Contact one of our investment advisors who will help narrow down your goals and choose a property that compliments your investment strategy.
I received an email about a property for sale, who do I contact?
On the email you received there should be the listing broker’s contact information. If you can’t find the email simply navigate to our listings section and find the property you are interested in. On the right hand side the broker’s contact information will be listed.
I am a broker with a client in exchange, is there a way to see your entire inventory?
Our listings section has our entire available inventory and each item is properly tagged with the status of the listing. If you wish to download our entire inventory you may do so on the listings search page. On the top right you will see a button labeled export inventory. This will export to PDF. You can choose to only export a custom search or the entire database. Please note you must be logged in to download the PDF.
Are there properties available in addition to what is on the site?
Each and every one of our investment advisors has access to off-market inventory. You would need to speak with the investment advisors to find out more about additional opportunities. If there is a specific product you are looking for we can set you up with an advisor who will target that asset for you, just note this may take a little bit of time.
How do I make an offer on a property I found on this site?
Once you are on the property specific page you will see a sidebar to the right. In the sidebar you will see a button referencing an LOI form. This will enable you to fill out and submit an offer directly on our site. (an industry first). If you have your own LOI form that you wish to use you can email it directly to info [at] signnn.com
I’m looking to hire a broker what should I do?
If you are currently engaged in communication with one of our investment advisors we strongly encourage you to continue working with that person. If you have not been in contact with anyone at SIG we encourage you to contact info [at] signnn.com and we will assist you.
What is an OM?
An Offering Memorandum or (OM) is a package that is uniquely prepared for each property. It is a comprehensive breakdown of the particular investment that contains but is not limited to: area overview, investment summary, financials, lease abstract, demographic analysis as well as photos of the property being marketed. This package is sent to interested parties upon their request in order for them to be able to make informed decisions regarding the acquisition of the asset.
How can I create an account so I can view the OM’s?
In the footer of our website you will see a link for account login, you will be taken to page where you may login or create a new account. Creating a new account is easy and we don’t require a long list of personal information in order to get started.
I want to sign up and receive property updates, how can I do that?
On the listings page you will see a contact form where you can enter your name and email to be added to the list. You can unsubscribe at any time.
I would like to discuss the possibility of listing my property with SIG, who do I contact?
If you have used one of our advisors before, simply contact that broker and they can help you with your property. If you have never communicated with anyone at SIG in the past please contact info [at] signnn.com and we will put you in contact with the most appropriate net lease advisor.
What is a 1031 exchange?
Refers to section 1031 of the Internal Revenue Code whereby the tax on the effective gain resulting from the sale of an investment property can be postponed if you reinvest the proceeds in a like-kind exchange.
According to the IRS website, “Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free. The exchange can include like-kind property exclusively or it can include like-kind property along with cash, liabilities and property that are not like-kind. If you receive cash, relief from debt, or property that is not like-kind, however, you may trigger some taxable gain in the year of the exchange. There can be both deferred and recognized gain in the same transaction when a taxpayer exchanges for like-kind property of lesser value.” You can read more at: IRC Section 1031.
Can you help with financing or loans?
We do not handle financing in-house, however we can refer you to companies we have worked with in the past that are very knowledgeable when it comes to commercial lending. Please send us an email to info [at] signnn.com and we will respond promptly.
How is SIG different from other commercial brokerages?
SIG has taken a truly innovative sector-specific approach to an increasingly popular asset class. The net lease arena has grown by leaps and bounds and has become a desired asset class among wealth management, private equity, institutional investors and commercial real estate investors alike.
What is the difference between NN, NNN, Ground Lease and Absolute Triple Net?
These are acronyms for the different lease types that are prevalent throughout the net lease arena. Net lease is a popular asset class among investors because of the limited landlord responsibilities. Real Estate ownership has always been synonymous with management headaches, property maintenance issues, and evictions to name a few. The simplicity of net lease coupled with high and stable returns makes for a truly desirable investment vehicle.
- Double Net Lease – (NN) refers to a lease wherein tenant pays for taxes, insurance, maintenance, CAM charges and the Landlord is responsible for roof and structure.
- Triple Net – (NNN) refers to a lease wherein the tenant is responsible for taxes, insurance, maintenance, CAM charges as well as roof and structure (zero landlord responsibilities).
- Ground Lease – (NNNGL) refers to a lease wherein the tenant is responsible for taxes, insurance, maintenance, CAM charges as well as roof and structure, but during the lease term the building is owned by the tenant, the tenant simply ‘‘leases the ground.’’ Upon termination of the lease, the building reverts back to the landlord.