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Willis Ventures Investment Real Estate specializes in the brokerage of single-tenant net leased retail properties nationally. Triple net lease investments are our most recommended form of real estate investment.
Shopping centers, office buildings, power centers, strip centers, and apartment complexes are management intensive. Single-tenant, triple-net, corporate-backed, retail properties are management free, reliable, and one of the most sought after types of real estate investments available.
A triple net lease, abbreviated NNN, refers to a lease in which the tenant pays for all expenses associated with:
- Real estate taxes
- Building insurance
- Utilities
- Property maintenance
In most instances with triple net leased retail property, the responsibility for the roof, building structure/foundation, and the parking area will be the tenant’s responsibly. In business terms, the word net is synonymous with “the bottom line,” or the total cash return to the investor. The tenant pays for net-real estate taxes (N), net-building insurance (N), and net-maintenance expenses (N) in a triple-net lease. The acronym for a triple-net lease is NNN. This abbreviation is widely used in real estate literature.
Triple-net leases are desirable investments because of their benefits compared to other types of investments. The major advantages of a triple net investment are:
- Management free
- Predictable monthly income
- Considerable tax advantages
- Credit-worthy corporations typically guarantee a triple-net lease
- Long-term income to the investor
Some investors tend to think that triple net leased investment properties have a minimal return when compared to other types of investment real estate. Typically, the return for many income producing commercial properties is higher than the return on an investment with a triple net lease. Though the return is not as high, an investment property with a triple net lease will mean an investor never has to worry about any of the following:
- Actual vacancy
- Management expenses and/or fees
- Tenant finish costs related to occupancy
- Leasing commissions
- Supplies and/or equipment replacement
- Wasted time and energy
With the above taken into consideration, it is apparent that the return on investment with a triple net leased property is most often more profitable in the long run. The security of the triple net leased investment and the absence of management duties are the benefits of this type of lease that balance the lower return.
The tenant typically assumes the responsibilities of the following:
- Property taxes
- Property liability and fire insurance
- Assessment payments
- Maintenance expenses
- Structural repairs
- Utilities
- Heating, ventilation, and air conditioning (HVAC)
- Lease payment to the landlord
The above is a general summary of the tenant responsibilities in a triple net lease, and is part of the reason why this type of lease is so attractive to investors. The absence of management responsibilities enables investors to be at ease with their investment. Commercial retail tenants tend to have a vested business interest in making sure the properties that they occupy are attractive to customers. The tenant commitment insures that an investor will own a property that is well maintained and safe.
It is always wise for an investor to have an attorney and/or accountant to review the lease of a triple net investment property. Additionally, it is helpful to consult with an insurance agent if additional insurance coverage is needed or is beneficial to the investor. Also, an exchange accommodator will be needed to assist and smooth the transfer of ownership in an exchange situation. Preferably, these professionals should have experience specifically in the area of NNN investment real estate.
Willis Ventures Investment Real Estate Brokerage has the necessary contacts and expertise to assist an investor in all the areas necessary to complete the purchase of a triple net leased investment.
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