Types of net leases
There are standard names in the commercial real estate industry
for different sets of costs passed on to the tenant in a net lease. Double and triple-net leases are more common
forms of net leases.
Single net lease (N)
In a single net
lease (sometimes shortened to Net or N), the lessee or tenant is
responsible for paying property taxes as well as the base rent.
Double net lease (NN)
In a double net
lease (Net-Net or NN) the lessee or tenant is responsible for property
tax and building insurance. The lessor or landlord is responsible for any expenses incurred for structural repairs
and common area maintenance. "Roof and structure" is sometimes calculated as a reserve amount, which the tenant
Triple net lease (NNN)
A triple net
lease (Net-Net-Net or NNN) is a lease agreement on a property where
the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance on the property. In
such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any
common area. This form of lease is most frequently used for commercial freestanding buildings. However, it has also
been used in single family residential rental real estate properties.
Bondable lease (Absolute NNN)
lease (also called an "absolute triple net lease", "true triple net
lease", or a "hell-or-high-water lease") is the most extreme variation of a triple net lease, where the tenant
carries every imaginable real estate risk related to the property. Notably, these additional risks include the
obligations to rebuild after a casualty, regardless of the adequacy of insurance proceeds, and to pay rent after
partial or full condemnation. These leases are not terminable by the tenant, nor is it permissible for rent to
be abated under
The concept is to make the rent absolutely net under all
circumstances, equivalent to the obligations of a bond. An example of this type of
lease would be a leaseback arrangement in which a
retailer leases back the building it formerly owned and continues to run the operate its business at the
Typically, triple net leases (NNN) are 'equity investments',
rather than 'cash flow investments'. For example, the investor will finance a significant portion of the purchase
price on a property and pay the resulting mortgage with the lessee's monthly owed rent. There is usually a small
amount left over as monthly profit for the investor (positive cash flow), but the greater investment payoff comes
from the tax
shields afforded to the investor through
the use of leverage. The resulting property is then sold after a period of building up equity.
Why Net Leased
Single Tenant Properties for Investments?
Investors buy net leased single
tenant properties for a variety of reasons such as no management responsibilities, a long-term lease, credit-
worthy high quality tenant, stable cash flow, attractive financing,
equity growth, unique tax benefits
and good capital
Triple net lease commercial investments are like
corporate bonds and areknown to be one of the safest and the most solid investments with dependable incomein
commercial real estate. The investor in corporate NNN property, not only benefits from the higher yields than
bonds or CDs, but also benefits from dependable steady long term income.
equity growth, and unique tax
incentives such as 1031 exchange in case of the sale, depreciation on improvments and more.
NNN properties offer the benefit of little orno management responsibilities, as
the tenant pays for most, if not all, of the expenses according to the terms of the lease. In Triple Net, (NNN)
or (Net Net Net) lease tenant pays for the net of taxes, the net of insurance, and the net of
Single Tenant NNN
properties are typically leased to a single tenant business for a long term, often 10-25 years.
Therefore banks due to minimal risk of investments are motivated to provide very attractive financing. Due to a
long term lease, Triple net
leased tenants generally have a vested business interest to make sure that a location is well maintained and is
attractive for all customers. They frequently make significant property improvements at their own expense to
enhance the real estate over time in order to be more successful with their customers.
What three things should I know before
investing in any NNN properties?
Does the forecasted supply and demand
relationship for the property in the selected location indicate success?
2) Location and Site
Will the location and site support the
Does the projected financial picture
indicate sufficient profit with the risk?
factors in pricing triple net (NNN) investment properties
A) The financial strength of the guarantor of the lease
B) The specific location of the property under consideration
C) The remaining length of the lease term and the periodic increases in the lease
D) The financial performance of the specific property under consideration
We strive hard to provide clients with quality costumer
We provide our clients with all of the information they need
upfront to make an informed decision, even before a Letter of Intent is issued such as: tenant credit information,
store sales, lease terms, options, renewal rates, rent escalations, location analysis, site analysis, market
analysis, demographic data, cash on cash returns on investment, internal rate of returns after taxes, risks, likes,
dislikes and so on. We will then strategies how to proceed on making a best offer. It is our goal to build a solid
relationship with our clients and keep them updated on net lease investments, even though they may not have a need
for years to come.
our listings locally, nationally and internationally
Triple Net Investment Group difference is a concept that is revolutionary in the
commercial real estate brokerage business. In addition to marketing our deals to potential investors, We markets
our listings to the entire brokerage community. We put our listings directly in front
of thousands of commercial real estate agents in each state, region and local where the property is
Are you looking for a specific
location or NNN tenant?
At nnndeals.com We pride ourselves in excellent client service. We
have access to an extensive
inventory of triple net single tenant properties for sale and contacts to find you exactly what you are
looking for such as:
Eleven Advance Auto
AT Autozone Bank of
Buy Bed Bath &
Beyond Blockbuster BP Burger
Bank Chevron Chili's Citibank Costco CVS Dollar
Mobil FedEx Food
Locker Gap Goodyear Home
Depot Jack in the
Bank KFC Kindercare KmartKohl's Lowe'sMcDonald Nordstrom Office
Boys PetSmart Pizza
Bank Popeyes Radio
Bank Regal Rite
Tuesdays Safeway Sears Staples Starbucks Shell
Bell Target T-Mobile Verizon Wachovia Walgreen Wal-Mart Wells
Fargo Wendy's Whole
Please contact us if you are buying or selling a net leased property. We get
results. Email: email@example.com