Triple Net Lease
- Triple Net Lease
In a Triple Net Lease, the tenant is responsible for the taxes, insurance, and maintenance, in additon to the lease payments, on a property.
Triple net lease properties are often associated with single tenant, stand alone retail properties such as Drugstores, Bank Branches, Discount/Dollar Stores, or Restaurants (fast food or casual dining); however, a wide variety of triple net lease properties are available to investors.
Net Lease properties may vary by:
- Asset Type: Retail, Office, or Industrial
- Location: major metro to smaller markets
- Lease Term: 5 – 25 years
- Tenant Credit Quality: Investment Grade & Below
- Size and value of property: $2.5 to $70 million or more
- Single or Multi-tenant
1031 Investment Services can assist you in sourcing and acquiring net lease properties that are best suited to your individual investment objectives, whether individually owned or through a Delaware Statutory Trust. Investors seeking control and/or the ability to refinance a property may prefer individual ownership. Investors who prefer diversification or have a smaller amount of equity to invest, may prefer a triple net lease Delaware Statutory Trust (DSTs have been available with as many as 16 triple net lease properties in one offering).
Our experience and relationships with many of the brokers, developers, and owners of triple net lease properties throughout the country can help expedite a search for a property that fits your acquisiton criteria. Please contact us for more information.
- Benefits of Triple Net Lease Properties
- Risks of Triple Net Lease Properties
- Current cash flow – Credit tenants with long term leases offer net lease investors the potential for a predictable income stream
- Inflation Hedge – Properties with rent escalations offer a hedge against inflation risk
- Passive Investment – In addition to lease payments, a triple net lease tenant is responsible for all operational aspects of the property (including maintenance, taxes, and insurance), thus making the property attractive to investors seeking relief from property management
- Estate Planning – Current cash flow, no management responsibility, and a potential step up in basis make triple net lease properties an attractive option to investors with estate planning considerations
- General Real Estate Risk – Triple net properties are not immune to risks associated with real estate investment including potential loss of value
- Tenant Default or Bankruptcy – A default or bankruptcy by a tenant may affect cash flow and the value of a triple net property
- Vacancy – A single tenant triple net lease property is either 100% occupied or 100% vacant thus making credit quality and lease term particularly important
