The NNN Lease is one of the most profitable forms of leasing for corporate property owners, because it drastically reduces both future investment and the amount of time you need to spend maintaining the property. Once you’ve decided to lease triple net, your property becomes someone else’s responsibility, while you’re still able to reap the benefits.
But although triple net leases are highly valuable investment strategies, not everyone can simply find someone that will sign on to one of these leases. Triple net leases are designed for a very specific type of property, and a very specific type of lessee.
Important Factors in Leasing Triple Net
Before you can lease triple net properties, there are several factors that go into these types of leases that you should know. These include:
- Triple Net Properties Are Single Occupant
In almost every case (with very few exceptions), triple net properties are rented by only a single business. That means that you’re relying heavily on only one tenant, and in some cases that may increase your risk.
- Tenant Credit/Quality Matters
With that in mind, there are very few tenants that will qualify for triple net leases. The vast majority of NNN leases are given to very well known brands, like McDonalds, Walgreens, or franchises with name recognition. Although technically almost any type of company can sign a triple net lease, very few could afford to pay it, and as a property owner you cannot risk giving an NNN lease to any company that cannot guarantee payment – if they default, it may take months before you can find someone to rent the property again.
- Not Every Property is Desirable
You have to be able to justify the idea of leasing triple net, and not every location is going to qualify for that style of lease. It has to be the right size, the right location, and the right price for a triple net lease to make sense for a business. Often these are properties that have already housed a triple net property, or were once owned by a similar type of business in the past.
After You Lease Triple Net
Still, despite all of these warnings, triple net leases are still highly advantageous for the investors that can find them. In fact, those that have a triple net lease on a property can turn that lease into a low interest loan, thus allowing you to receive an immediate payoff on your property so that you do not have to wait for your property to earn you revenue.
If you’re interested in learning more about triple net loans, sign up with CRE Lender today. We’re the number one way to get you linked to a lender that would love an opportunity to take on your triple net lease loan. Sign up with us right now to learn more.
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