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With over 20,000 NNN Properties for sale, it is important to know how to identify the best NNN Properties for Sale.
The Best Triple Net Properties Should:
NOT COMPETE WITH AMAZON
Perform well in a recession
Perform well during a pandemic
Be a public corporation
Have an investment-grade credit rating
Have guaranteed lease payments
No rent holidays
Longest possible lease
Multiple renewal options
Have an investment-grade credit rating
Have rent increases at each option period
Have a population of 10,000+ people within a 5-mile radius
Have a stable or expanding population
Have a minimum of 3,000 cars per day passing the property
Have a good number and diversity of employers in the area
Offer a superior return compared to other asset classes
Offer a superior return compared to other triple-net tenants
Have a size and layout that will make it easy to re-tenant the property if necessary
NNNs vs DSTs - Which Are Better?
NNNs vs DSTs - Which Are Better?
| Aspect | Triple Net (NNN) Properties | Delaware Statutory Trusts (DSTs) |
|---|---|---|
| Income Stability | High - Income guaranteed for the length of the lease | Low Income projected on sponsor's assumptions |
| Sponsor Risk | None - You are in complete control | High - Dependent on sponsor's competence and integrity |
| Lease Terms | Long-term (10–25 years) | Varies based on portfolio |
| Management | Tenant handles ALL responsibilities | Fully managed by trustee/sponsor |
| Control | High - Direct ownership, full control over decisions | Low - No control over management, lease terms, or sale |
| Tax Benefits | Depreciation deductions, 1031 exchange eligibility | 1031 exchange eligibility |
| Initial Investment | High - Significant upfront capital required | Lower - Accessible with smaller investment amounts |
| Diversification | Low - Typically one property | High - Often includes a portfolio of properties |
| Potential Returns | Potentially high, especially with property appreciation | Potentially lower due to management fees and shared returns |
| Risk | Tenant risk - If tenant defaults, investor covers interim costs | Spread risk - Diversified properties reduce individual property risk |
| Liquidity | Moderate - Direct sale of property possible | Low - Hard to sell shares before trust liquidation |
| Complexity | Lower - Direct property ownership is straightforward | Higher - Complex structure with potential higher fees |
NNN Leased Properties
How to Evaluate NNN Leased Property
- 1. Property Inspection and Evaluation
- 2. Financial Analysis
- 3. Legal Review
- 4. Market Analysis
Why NNNs are Best for 1031 Exchanges
Why NNNs are Best for 1031 Exchanges
Most investors sell their property and want to exchange into a triple net property because they are tired of the hassle and inconvenience of managing their own property. A NNN property can be the ideal replacement property because, in addition to being a completely passive investment, their income is typically guaranteed by a multi-billion-dollar corporation with an investment-grade credit rating.
- 1. Stable and Predictable Income
- 2. Lower Management Responsibilities
- 3. Long-Term Leases
- 4. High-Quality Tenants
Why Use Triple Net Companies
At Triple Net Companies
- 1. Exclusive Representation for Buyers
- 2. Proven Track Record
- 3. Access to Exclusive Properties
- 4. Comprehensive Due Diligence
FAQ’s
A triple net lease requires the tenant to pay, in addition to rent, all of the property expenses that normally would be paid by the property owner, including real estate taxes, insurance, maintenance costs and utilities.
Typically, net lease assets tend to be single tenant, free standing buildings such as banks and fast food restaurants that can come with a corporate guarantee which makes the corporation, not the property, responsible for making your monthly payments.
A single-tenant, net-leased investment is typically a freestanding office, retail, or industrial building that is leased and occupied by one user or one company. Typically the tenant has committed to a long-term lease – usually longer than 10 years, and as long as 25 years with increasing rent over the lease term.
Many net-lease investors have previously owned other types of real estate but are looking for an investment that requires less maintenance and supervision. For example, many apartment investors end up selling their high-maintenance properties and then reinvesting the sale proceeds in single-tenant, net-leased retail properties, as do many landowners who have previously never received any income or tax benefits from their property.
Anyone can invest in single-tenant leased properties. Other than large institutional investors and life insurance companies who invest in triple net leases because of the security they offer, individual investors who own single-family rentals who are just tired of having to deal with tenants or are afraid their equity will be wiped out in another market shift, are ideal candidates, especially since they can sell their rental and exchange that equity, tax free, into a net-leased property.
While there are fewer risks related to investing in single-tenant, net-leased properties, as compared to more speculative real estate investments, tenants with non-investment grade credit profiles offer higher levels of risk. But that risk typically provides higher returns as well. And investors always need to think about the “re-leaseability” of a property if the tenant were to vacate the space.
Unlike traditional real estate investments whose valued is determined exclusively by the real estate itself, a single-tenant, net-leased property’s value is determined by a combination of factors including the tenant’s credit, the length of the lease and rental escalations over the term, and, last but not least, the real estate. In markets where the real estate experiences wide valuation swings, a single-tenant, net-leased property will maintain its value because of its bond-like, long-term lease and the credit tenant guaranty for the lease.
Net-leased properties are like all-weather tires. They are good investments in both good and bad economic times and in hot and cold real estate markets. Here’s why: a single-tenant net lease investment is guaranteed by the lease at pre-set rental rates. As an owner, you know exactly who will be a tenant in your building, how long that tenant will be there and exactly how much rent they will pay. That means you will derive a predetermined income from your investment, as long as the tenant is occupying the asset and current with the terms of their lease.
Testimonials
From the initial consultation to the closing of the deal, their team demonstrated unparalleled professionalism, deep market knowledge, and an impressive commitment to my investment needs.
Phil Gautney
Triple Net Companies exceptional guidance and remarkably thorough due diligence process ensured that my transaction proceeded smoothly. I wholeheartedly recommend their services and look forward to partnering with them for future investments.
Robert Thompson
Reasons Why NNN Properties are Superior to DSTs
Higher Returns
NNN properties typically offer higher returns than DSTs
No Fees
DSTs involve management fees regardless of how well the property performs, while NNN properties do not.
Liquid
NNN Properties are more liquid than DSTs. You can sell you NNN when you want.
Trustworthy Income
NNN investments are typically backed by multi-billion dollar corporations.
Simplified Regulatory Environment
NNN transactions typically involve simpler processes and fewer regulatory complexities compared to DST investments, which are subject to SEC regulations and intermediaries.
More Control
Owning a NNN property will give you control over your investment.
Guaranteed Income
NNN properties provide guaranteed income. DSTs offer preferred returns.
No Commissions
NNN buyers pay no commissions, DSTs may incur commissions ranging from 2% to 10% of invested equity plus backend fees.
Tax Advantages
NNN properties offer potential benefits such as depreciation deductions, enhancing tax efficiency for investors.
Flexibility in Property Selection
Investors have the flexibility to choose NNN properties that best align with their investment goals and criteria.
