How to Find the Best NNN Properties for Sale
Investing in triple net (NNN) properties can provide a stable and lucrative income stream, but finding the right property is crucial. Here’s a comprehensive guide to identifying the best triple net properties for sale.
When searching for the ideal NNN property, consider the following factors:
Avoid Direct Competition with Amazon
Select properties that do not directly compete with Amazon. Retailers providing services and goods that cannot be easily fulfilled online, such as fast food, automotive services, and medical offices, are excellent choices.
Resilient During Recessions
Opt for properties that perform well during economic downturns. Essential services such as grocery stores, pharmacies, and discount retailers tend to maintain strong performance even in challenging economic times.
Pandemic-Proof Tenants
Choose tenants that have proven resilient during pandemics. Businesses like pharmacies, quick-service restaurants with drive-thrus, and essential retail stores have shown strong performance during such periods.
Public Corporations
Invest in properties leased to public corporations. These companies are typically more financially stable, providing a lower risk of default.
Investment-Grade Credit Rating
Look for tenants with an investment-grade credit rating. This rating indicates a lower risk of default, ensuring more reliable income.
Guaranteed Lease Payments
Ensure the lease agreement includes guaranteed payments. This provides a reliable income stream, reducing the risk of missed payments.
No "Rent Holidays" or "Out Clauses"
Avoid leases with “rent holidays” or “out clauses” (weasel clauses). These can allow tenants to defer or skip payments, impacting your income.
Long-Term Leases
Seek properties with the longest possible lease terms, ideally 15 years or more. Longer leases provide greater income stability and reduce the frequency of tenant turnover.
Multiple Renewal Options
Select properties with multiple renewal options in the lease. This ensures a continued income stream beyond the initial lease term.
Rent Increases at Each Option Period
Ensure the lease includes rent increases at each renewal option period. This helps protect against inflation and increases your income over time.
Strong Demographic Area
Choose properties located in areas with a population of at least 10,000 people within a 5-mile radius. A stable or growing population ensures a consistent customer base for the tenant.
High Traffic Count
Look for properties with a minimum of 3,000 cars passing per day. High traffic counts indicate good visibility and accessibility, essential for tenant success.
Diverse Employers
Invest in areas with a good number and diversity of employers. This indicates a healthy local economy, supporting the tenant’s business.
Superior Returns
Select properties that offer a superior return compared to other asset classes and other triple-net tenants. This ensures your investment is financially rewarding.
Flexible Property Layout
Ensure the property has a size and layout that will make it easy to re-tenant if necessary. Flexibility in property use reduces the risk of prolonged vacancies.
Why choose us as your buyer's broker?
As a buyer’s broker, we specialize in finding the best NNN properties on the market. We work directly with developers and all the major listing brokers, ensuring we have access to the top properties available. Additionally, our services come at no cost to you, as we are compensated by the seller.
By partnering with us, you gain a trusted advisor with extensive market knowledge and access to exclusive opportunities. Let us help you find the ideal NNN property that meets all your investment criteria and secures your financial future.