Learn the Net Lease Basics
With a global financial market that is known to be volatile at times, investors are often looking for a stable and predictable place to put their money. Similar to buying a bond, investing in triple net lease properties is one of the smartest and most reliable investment tools available today.
While we know this is a great opportunity for many investors, it can be confusing to those unfamiliar with commercial real estate or 1031 exchanges. Let our experts walk you through the basics of buying and selling net lease and triple net lease (NNN) properties.
Also, visit our Properties page to see Upland’s list of available net lease investment opportunities. For additional questions, please contact us.
What is a Net Lease Investment Property?
A net leased investment is typically a single-tenant or multi-tenant retail, office, medical or industrial building that is leased and occupied by one or multiple users. The tenant has typically committed to a long-term lease that is generally 10+ years . Depending on how the leases are structured, they can be net net leases (“NN”) or triple net leases (“NNN”). Upland strong advises clients to consult and review all lease agreements with an attorney.
Definition of Lease Type
NN – Landlord responsible for repair and replacement of roof, structure, parking log & sometimes landscaping. Tenant responsible for HVAC maintenance & repair.
NN+ – Landlord responsible for replacement of roof & structure. Tenant responsible for repair of the roof structure, parking and landscaping.
NNN – No landlord maintenance responsibilities. Tenant responsible maintenance, repair and replacement of roof, structure, parking lot & landscaping
FAQs
What process is involved in buying a net-lease property through Upland?
Upland is dedicated to finding the right property for your investment needs using our well established Net Lease Investor Maximizer. Our experienced sales team will analyze the levels of risk versus return in order to get you the maximum return from your net lease acquisition. Click HERE to review a brief overview of Upland’s Investor Maximizer.
What process is involved in selling my net-lease development or property through Upland?
Upland is committed to find the right buyer and the highest value for your property with our proven Net Lease Sales Maximizer. Click HERE to review a brief overview of Upland’s Sales Maximizer.
Which states have no state income taxes on property income?
Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. New Hampshire and Tennessee have tax dividend income at varying rates.
How are net-lease assets valued?
Net-leased property values are determined by a combination of factors including the credit of the tenant (financial statements, credit rating, history/business model), the Lease Agreement (length of term, rent increases, renewal options, termination rights, etc.), and the real estate (Location, Location, Location!).
What are the benefits of investing in net-lease properties?
Net-lease properties are often referred to as bond-like investments because of their stable and predictable returns. The Net- lease investment is considered by many to be one of the least risky of all real estate investments, since these properties typically involve a binding long term lease that is in place. If the tenant is considered “investment grade”, the risk is substantially mitigated.
What are the risks of investing in net-lease properties?
While the risks relating to net-leased properties is much less than traditional real estate investments, tenants with non-investment grade credit offer higher levels of risk for an investor, however, this risk is typically offset by a higher return. An investor will have re-leasing opportunity in the event a tenant was to vacate the space.
Does Upland offer other commercial real estate services besides net lease sales?
Absolutely! This website, nnnsales.com, is dedicated to the Upland Net Lease Sales Team, which focuses on net lease investment sales. We also have a wide range of brokerage services for individuals, small businesses, and corporations. The services provided by our expert brokers include property valuations, lease renewals, and representation for tenants, landlords, buyers, and sellers. For more information, visit www.upland.com.