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Best & Worst States for Triple Net (NNN) Properties in 2025: Complete 1031 Exchange Investment Rankings

Triple Net (NNN) properties

Investing in Triple Net (NNN) properties through a 1031 exchange is one of the most effective ways to grow wealth while deferring taxes. But not all states are created equal. Each one offers a unique mix of tax policy, tenant demand, market stability, and long-term growth potential.

In this guide, we rank all 50 U.S. states plus Washington, D.C. and U.S. territories—from the best to the most challenging—based on:

  • Tax environment
  • Tenant stability
  • Cap rates & entry cost
  • Job and population growth
  • Risk factors (natural disasters, regulation, liquidity)
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Top 10 States for NNN Investment

1. Texas

It’s no surprise that Texas tops the list. The no-income-tax policy, booming job market, and fast-growing population make it a magnet for NNN investors. While property taxes are higher in some counties, strong tenant demand and appreciation usually balance things out.

Hot Markets:

  • Houston (Harris County): Energy, healthcare, and shipping powerhouse.
  • Austin (Travis County): Tech innovation hub with startups and established giants.
  • Dallas–Fort Worth (Dallas/Tarrant Counties): Retail, industrial, and transport center.
  • San Antonio (Bexar County): Military base stability and tourism-driven growth.

Why Texas Works:

  1. Rapid job and population inflow.
  2. No state income tax.
  3. Broad, diversified economy.

1031 Exchange Edge:
Texas has no shortage of like-kind replacement properties—retail, industrial, and medical—which makes it a go-to destination for tax-deferred exchanges.

2. Florida

Florida continues to shine thanks to year-round tourism, surging migration, and zero state income tax. The challenge? Hurricanes and rising insurance costs. But for most investors, the upside outweighs the risks.

Hot Markets:

  • Miami–Dade & Broward Counties: Retail and international trade hotbeds.
  • Orlando (Orange County): Tourism and tech-fueled tenant demand.
  • Tampa Bay (Hillsborough & Pinellas): Expanding finance and healthcare.
  • Jacksonville (Duval County): A growing port and logistics hub.

Why Florida Works:

  1. Strong domestic and international migration.
  2. Pro-business tax climate.
  3. Diverse economic drivers beyond tourism.

1031 Exchange Edge:
From single-tenant retail to industrial and medical properties, Florida offers abundant 1031 exchange options with stable returns.

3. Tennessee

Tennessee has quietly become an investor favorite. With no state income tax, affordable property prices, and pro-landlord laws, it’s one of the best value states for NNN buyers.

Hot Markets:

  • Nashville (Davidson County): Healthcare, music, and tech growth.
  • Memphis (Shelby County): FedEx-driven logistics economy.
  • Knoxville & Chattanooga: Manufacturing, tourism, and university influence.

Why Tennessee Works:

  1. No income tax and landlord-friendly laws.
  2. Broad tenant base across healthcare, logistics, and manufacturing.
  3. Lower entry costs than coastal states.

1031 Exchange Edge:
Affordable entry points plus solid cap rates make Tennessee a top relocation spot for investors leaving higher-cost states.

4. Washington

Washington’s no-income-tax policy and powerhouse corporate tenants (Amazon, Microsoft, Boeing) make it a stable NNN market. High entry costs are the biggest hurdle, but appreciation potential often makes up for it.

Hot Markets:

  • Seattle (King County): Tech epicenter.
  • Bellevue & Redmond: R&D and corporate offices.
  • Spokane & Tacoma: Expanding industrial/retail hubs.

Why Washington Works:

  1. Major corporate tenants.
  2. Economic diversity across tech, healthcare, and logistics.
  3. Strong long-term rental demand.

1031 Exchange Edge:
A perfect landing spot for investors trading into premium, stable properties.

5. Nevada

Nevada checks a lot of boxes: no state income tax, investor-friendly policies, and booming metros like Las Vegas and Reno. Tourism dependence and water scarcity are watchpoints, but overall, it’s an attractive market.

Hot Markets:

  • Las Vegas (Clark County): Tourism and retail tenant demand.
  • Reno & Sparks (Washoe County): Logistics, manufacturing, and tech growth.
  • Henderson & North Las Vegas: Residential expansion fueling retail.

Why Nevada Works:

  1. Zero income tax.
  2. Balanced tenant pool across tourism, logistics, and tech.
  3. Strong migration-driven growth.

1031 Exchange Edge:
Plenty of retail, industrial, and office properties are available for exchanges.

6. Arizona

Arizona combines rapid population growth with favorable cap rates, especially in Phoenix and Tucson. Rising property values are worth noting, but tenant demand remains robust.

Hot Markets:

  • Phoenix & Scottsdale (Maricopa County): Tech, healthcare, and finance growth.
  • Tucson (Pima County): University and manufacturing demand.
  • Mesa & Chandler: Suburban expansion.

Why Arizona Works:

  1. Strong migration trends.
  2. Diverse economy.
  3. Attractive cash flow opportunities.

1031 Exchange Edge:
A variety of retail and industrial properties make Arizona an excellent exchange option.

7. North Carolina

Affordable, stable, and growing—North Carolina offers one of the most balanced NNN investment environments in 2025.

Hot Markets:

  • Charlotte (Mecklenburg County): Banking and finance headquarters.
  • Raleigh–Durham: Research Triangle’s tech and healthcare hub.
  • Greensboro & Winston-Salem: Manufacturing and logistics.

Why North Carolina Works:

  1. Lower property costs with growth upside.
  2. Economic diversity.
  3. Strong population gains.

1031 Exchange Edge:
Excellent replacement property choices across retail, office, and industrial.

8. Indiana

Often overlooked, Indiana offers affordable entry prices, strong yields, and landlord-friendly laws.

Hot Markets:

  • Indianapolis (Marion County): Healthcare and logistics demand.
  • Fort Wayne & Evansville: Manufacturing hubs.
  • Bloomington & Lafayette: Stable university towns.

Why Indiana Works:

  1. Low property prices.
  2. Business-friendly legal climate.
  3. Steady tenant demand.

1031 Exchange Edge:
Secondary markets like Indiana offer great exchange opportunities with solid returns.

9. Georgia

Anchored by Atlanta, Georgia combines a strong corporate presence, logistics hubs, and affordable secondary markets.

Hot Markets:

  • Atlanta (Fulton & DeKalb): Corporate and logistics powerhouse.
  • Savannah (Chatham County): Port city growth.
  • Augusta & Macon: Healthcare and manufacturing expansion.

Why Georgia Works:

  1. Atlanta’s corporate tenant base.
  2. Affordable entry in secondary markets.
  3. Diverse economy.

1031 Exchange Edge:
Investors can trade into both premium and affordable properties with reliable tenant demand.

10. Colorado

Colorado is a growth and appreciation play. Entry costs are higher, but population and tenant demand—especially in Denver and Colorado Springs—are strong.

Hot Markets:

  • Denver: Tech and finance magnet.
  • Boulder & Fort Collins: University and tech-driven economies.
  • Colorado Springs: Military and logistics.

Why Colorado Works:

  1. Strong long-term growth.
  2. Diverse economy.
  3. Steady rental demand.

1031 Exchange Edge:
Ideal for investors prioritizing appreciation while still deferring taxes through 1031.

Middle Tier States (11-40)

11. Alabama

For investors seeking affordable entry points, Alabama stands out. Property prices are lower compared to many states, but yields are attractive, especially in the metros. Rural markets may move slower, but cities like Birmingham and Huntsville deliver long-term stability.

Hot Markets:

  • Birmingham (Jefferson County): Anchored by healthcare, finance, and corporate offices.
  • Huntsville (Madison County): Fast-growing aerospace, defense, and technology hub.
  • Mobile & Montgomery: Logistics, manufacturing, and government-driven stability.

Why Alabama Works:

  1. Low property prices with solid returns.
  2. Metro areas boast growing, diverse economies.
  3. Landlord-friendly laws support investor security.

1031 Exchange Edge:
Affordable NNN deals make Alabama a smart choice for those exchanging out of pricier states and seeking steady income-producing assets.

12. Idaho

Idaho is one of the fastest-growing states in the U.S., and Boise sits at the center of it. While liquidity is thinner outside the metro, the state’s growth trajectory makes it appealing for long-term investors.

Hot Markets:

  • Boise (Ada County): Tech, healthcare, and retail expansion fuel strong demand.
  • Twin Falls & Idaho Falls: Industrial and logistics growth hubs.
  • Caldwell & Nampa: Suburban growth driving retail and commercial demand.

Why Idaho Works:

  1. Rapid population growth and migration.
  2. Economic diversity spanning tech, healthcare, and industry.
  3. Boise offers significant appreciation potential.

1031 Exchange Edge:
Idaho provides attractive opportunities to roll capital gains into high-demand, growth-driven properties with reliable tenants.

13. Missouri

Missouri offers a balance of affordable cap rates and reliable tenant demand. The big metros—Kansas City and St. Louis—anchor the state’s economy, while smaller cities give investors access to steady cash flow at lower costs.

Hot Markets:

  • Kansas City (Jackson County): Strong in logistics, corporate offices, and retail.
  • St. Louis (St. Louis County): Healthcare, finance, and industrial stability.
  • Springfield & Columbia: University towns and manufacturing growth.

Why Missouri Works:

  1. Affordable entry with attractive yields.
  2. Well-rounded economy across major sectors.
  3. Tenant stability in both large and mid-sized markets.

1031 Exchange Edge:
Missouri’s mix of primary and secondary markets provides plenty of replacement properties for investors seeking consistent income.

14. South Carolina

South Carolina’s appeal lies in its booming metros and growing logistics sector. Cities like Charleston and Greenville offer strong tenant demand, though investors must weigh the risks of coastal storms and higher insurance premiums.

Hot Markets:

  • Charleston (Charleston County): Port trade, tourism, and logistics demand.
  • Greenville (Greenville County): Expanding manufacturing, tech, and healthcare.
  • Columbia (Richland County): Government and education anchor tenants.

Why South Carolina Works:

  1. Fast-growing population and job market.
  2. Diverse tenant base across multiple sectors.
  3. Metro areas combine steady cash flow with appreciation.

1031 Exchange Edge:
From coastal hubs to inland metros, South Carolina has ample exchange-ready NNN properties.

15. Ohio

Ohio provides stability and affordability. While appreciation is more modest than coastal states, cash flow reliability and tenant demand make it an attractive long-term play.

Hot Markets:

  • Cleveland (Cuyahoga County): Healthcare and manufacturing strength.
  • Columbus (Franklin County): Tech, education, and government tenants.
  • Cincinnati (Hamilton County): Logistics and corporate demand.

Why Ohio Works:

  1. Affordable entry points with good yields.
  2. Diversified economy and steady demand.
  3. Reliable tenant stability, even in downturns.

1031 Exchange Edge:
Ohio’s secondary markets are excellent for exchanges, providing dependable, income-producing assets at a lower cost.

16. Kentucky

Kentucky is a value play for NNN investors. Metro areas like Louisville and Lexington anchor the economy, while secondary markets add affordable opportunities with strong tenant demand.

Hot Markets:

  • Louisville (Jefferson County): Logistics and manufacturing strength.
  • Lexington (Fayette County): University and equine industries boost stability.
  • Bowling Green & Owensboro: Expanding industrial and retail activity.

Why Kentucky Works:

  1. Low property costs with healthy yields.
  2. Diverse tenant mix across logistics, healthcare, and education.
  3. Consistent rental demand.

1031 Exchange Edge:
Kentucky provides an easy entry into stable NNN deals, ideal for investors seeking both metro and secondary market opportunities.

17. Utah

Utah has become one of the country’s fastest-growing states, with Salt Lake City and Provo leading the charge. Rising property prices are worth watching, but tenant demand and economic fundamentals remain rock solid.

Hot Markets:

  • Salt Lake City (Salt Lake County): Tech and finance tenants drive growth.
  • Provo & Orem (Utah County): Education and manufacturing hubs.
  • Ogden & St. George: Expanding industrial and retail markets.

Why Utah Works:

  1. Rapid population and job growth.
  2. Strong, diverse economy.
  3. High tenant demand ensures steady income.

1031 Exchange Edge:
Utah offers a wide range of exchange opportunities, from retail to industrial, in markets with long-term growth drivers.

18. Virginia

Virginia is unique for its federal tenant base and defense-heavy economy, making it one of the more stable NNN states. Property prices are higher, but steady occupancy and reliable tenants often justify the premium.

Hot Markets:

  • Northern Virginia (Fairfax, Loudoun, Arlington): Federal agencies, tech, and contractors.
  • Richmond: Healthcare, finance, and government hubs.
  • Hampton Roads (Norfolk & Virginia Beach): Military and port-driven demand.

Why Virginia Works:

  1. Federal and corporate tenants provide unmatched stability.
  2. Diverse sectors including defense, logistics, and healthcare.
  3. Strong demand in suburban and metro areas.

1031 Exchange Edge:
Virginia is ideal for investors seeking premium stability in exchange properties, with high-credit tenants and consistent income streams.

19. Pennsylvania

Pennsylvania continues to be a dependable NNN market, particularly in larger metros and mid-sized cities. While the tax burden here is higher than in the Southeast, its broad-based economy makes up for the added costs.

Hot Spots

  • Philadelphia (Philadelphia County): Home to finance, healthcare, and major corporate offices that anchor long-term tenants.
  • Pittsburgh (Allegheny County): A growing hub for tech, healthcare, and industrial investments.
  • Harrisburg, Lancaster & Allentown: Smaller but steady markets fueled by logistics, government, and manufacturing.

Why Invest

  1. Economic diversity ensures consistent tenant demand.
  2. Reliable cash flow in both primary and secondary markets.
  3. More affordable than many Northeast coastal states outside major metros.

1031 Advantage
Pennsylvania offers a wide mix of like-kind NNN properties, making it a strong choice for investors looking to defer capital gains while maintaining steady income streams.

20. Oregon

Oregon’s NNN opportunities center around Portland, where corporate tenants and inbound migration support long-term stability. However, high property taxes and strict regulations require careful navigation.

Hot Spots

  • Portland (Multnomah County): Anchored by tech, corporate, and manufacturing tenants.
  • Eugene & Salem: Education and government keep demand steady.
  • Bend & Medford: Expanding retail and service industries add growth potential.

Why Invest

  1. Portland’s corporate and tech demand strengthens tenant reliability.
  2. Population growth and migration trends support occupancy.
  3. Secondary markets offer stable but more limited opportunities.

1031 Advantage
Like-kind exchanges are possible in Oregon, but investors should weigh the upside of tenant demand against the cost of higher taxes and regulations.

21. Michigan

Michigan is known for affordability and higher yields, with Detroit offering both risk and reward through its ongoing revitalization.

Hot Spots

  • Detroit (Wayne County): Automotive, logistics, and redevelopment projects drive tenant growth.
  • Grand Rapids & Lansing: Manufacturing, healthcare, and education sectors anchor occupancy.
  • Ann Arbor: A university-driven economy creates stable tenant demand.

Why Invest

  1. Low entry costs and attractive cap rates.
  2. Economic mix spanning healthcare, automotive, education, and logistics.
  3. Detroit redevelopment provides long-term appreciation potential.

1031 Advantage
Michigan has many like-kind properties for investors seeking to roll gains into affordable, income-generating assets.

22. Minnesota

Minnesota’s Twin Cities region is one of the most reliable NNN markets in the Midwest, with healthcare, finance, and corporate headquarters driving long-term stability.

Hot Spots

  • Minneapolis–Saint Paul (Hennepin & Ramsey Counties): A financial and corporate hub with steady tenant demand.
  • Rochester: Healthcare and medical research dominate.
  • Duluth & St. Cloud: Logistics and education add secondary opportunities.

Why Invest

  1. Strong, diverse economy across industries.
  2. Reliable tenant base ensures steady cash flow.
  3. Smaller markets provide affordable entry points.

1031 Advantage
The state offers solid like-kind exchange options, helping investors lock in reliable income while deferring taxes.

23. Wisconsin

Wisconsin appeals to conservative investors who value cash flow over appreciation. Yields are strong, especially in Milwaukee and Madison.

Hot Spots

  • Milwaukee (Milwaukee County): Driven by manufacturing, healthcare, and corporate demand.
  • Madison (Dane County): A steady government and education-based economy.
  • Green Bay & Eau Claire: Industrial and retail tenants round out the mix.

Why Invest

  1. Attractive cap rates with consistent income.
  2. Broad economic base across key sectors.
  3. Strong occupancy rates in both metros and smaller cities.

1031 Advantage
Wisconsin provides dependable like-kind exchange options for investors prioritizing cash flow.

24. New Mexico

New Mexico offers affordability and steady tenants, though growth is modest compared to other regions.

Hot Spots

  • Albuquerque (Bernalillo County): Anchored by government, healthcare, and logistics.
  • Santa Fe (Santa Fe County): Tourism and arts-driven stability.
  • Las Cruces: Expanding retail and industrial presence.

Why Invest

  1. Low-cost properties with solid returns.
  2. Stable tenant base from government and healthcare.
  3. Value opportunities in secondary markets.

1031 Advantage
New Mexico provides affordable 1031 opportunities with dependable income-producing assets.

25. Arkansas

Arkansas is one of the most affordable NNN states, with metro markets providing strong tenant demand.

Hot Spots

  • Little Rock (Pulaski County): Driven by healthcare, retail, and government.
  • Fayetteville & Bentonville: Corporate presence from Walmart and growing logistics.
  • Fort Smith & Jonesboro: Industrial and retail opportunities.

Why Invest

  1. Extremely low-cost entry with strong yields.
  2. Tenant stability in key metros.
  3. Secondary markets add growth with selective investment.

1031 Advantage
Arkansas provides excellent opportunities to roll gains into low-cost, income-generating properties.

26. Oklahoma

With low property costs and high yields, Oklahoma is an attractive NNN state, though its reliance on the energy sector adds volatility.

Hot Spots

  • Oklahoma City (Oklahoma County): Energy and logistics hubs.
  • Tulsa (Tulsa County): Finance, energy, and industrial tenants.
  • Norman & Broken Arrow: Expanding retail and office space.

Why Invest

  1. Affordable prices and strong returns.
  2. Diverse economy beyond just energy.
  3. Strong tenant demand in both primary and secondary markets.

1031 Advantage
Oklahoma provides like-kind exchange options with high yield potential for cost-conscious investors.

27. Louisiana

Louisiana is affordable with reliable tenant demand, though natural disaster risks must be factored in.

Hot Spots

  • New Orleans (Orleans & Jefferson Parishes): Anchored by tourism and logistics.
  • Baton Rouge (East Baton Rouge Parish): Driven by government and petrochemical industries.
  • Shreveport & Lafayette: Healthcare and industrial tenants.

Why Invest

  1. Low acquisition costs with strong yields.
  2. Broad tenant base across key industries.
  3. Consistent cash flow despite hurricane and flood risks.

1031 Advantage
Louisiana offers strong like-kind exchange options, though risk management is key.

28. Montana

Montana’s growth markets like Bozeman and Missoula are drawing attention, though liquidity outside major towns is limited.

Hot Spots

  • Billings (Yellowstone County): Energy, healthcare, and retail support.
  • Missoula (Missoula County): Tourism and education-driven demand.
  • Bozeman & Helena: Growing tech and services.

Why Invest

  1. Population growth fuels long-term demand.
  2. Healthcare and education anchor tenants.
  3. Secondary cities provide appreciation potential.

1031 Advantage
Montana’s growing metros provide strong 1031 exchange opportunities, though selection outside major towns requires caution.

29. Nebraska

Nebraska is a conservative but steady NNN market with consistent tenant demand.

Hot Spots

  • Omaha (Douglas County): Corporate, finance, and logistics presence.
  • Lincoln (Lancaster County): Anchored by education and healthcare.
  • Grand Island & Kearney: Industrial and retail opportunities.

Why Invest

  1. Affordable pricing with stable returns.
  2. Diverse tenant base.
  3. Minimal volatility with reliable occupancy.

1031 Advantage
Nebraska provides low-risk 1031 opportunities for investors prioritizing stability.

30. Iowa

Iowa provides consistent returns, though liquidity is more limited in smaller cities.

Hot Spots

  • Des Moines (Polk County): Anchored by insurance and finance.
  • Cedar Rapids (Linn County): Manufacturing and healthcare tenants.
  • Davenport & Iowa City: Retail and education-based demand.

Why Invest

  1. Reliable cash flow.
  2. Strong industry mix across healthcare, education, and finance.
  3. Affordable entry costs.

1031 Advantage
Iowa supports like-kind exchanges into stable, low-risk markets.

31. Kansas

Kansas offers affordability and landlord-friendly laws that make it appealing for income-focused investors.

Hot Spots

  • Wichita (Sedgwick County): Aerospace and manufacturing anchor tenants.
  • Kansas City Metro (Johnson & Wyandotte Counties): Corporate and retail growth.
  • Topeka & Lawrence: Government and education support.

Why Invest

  1. Low entry costs with strong returns.
  2. Pro-investor regulations.
  3. Stable tenant base across multiple sectors.

1031 Advantage
Kansas provides affordable 1031 exchange properties with reliable yields.

32. North Dakota

North Dakota offers high-yield potential in energy-driven markets, but volatility is a risk.

Hot Spots

  • Bismarck (Burleigh County): Government and healthcare demand.
  • Fargo (Cass County): Education and logistics tenants.
  • Williston (Williams County): Energy-driven, high-yield opportunities.

Why Invest

  1. Strong income potential in energy hubs.
  2. Stability in secondary cities.
  3. High cap rates for risk-tolerant investors.

1031 Advantage
North Dakota offers 1031 opportunities, though investors must carefully weigh energy-sector volatility.

33. South Dakota

South Dakota is small but attractive, thanks to its tax advantages and investor-friendly environment.

Hot Spots

  • Sioux Falls (Minnehaha County): Finance, healthcare, and retail tenants.
  • Rapid City (Pennington County): Tourism and industrial activity.
  • Aberdeen & Brookings: Education-driven demand.

Why Invest

  1. No state income tax and landlord-friendly laws.
  2. Reliable tenants across finance, healthcare, and education.
  3. Smaller markets mean less competition for deals.

1031 Advantage
South Dakota is a tax-efficient place to roll capital gains into income-generating assets.

34. Maine

Maine may not be the fastest-growing state, but it does provide affordable entry points for NNN investors. Cities like Portland and Bangor continue to attract reliable tenants, thanks to their strong healthcare, education, and government presence.

Hot Spots

  • Portland (Cumberland County): Education, healthcare, and retail sectors drive consistent tenant demand.
  • Bangor (Penobscot County): Government and healthcare tenants keep occupancy stable.
  • Lewiston & Augusta: Secondary markets offering opportunities in retail and light industrial.

Why Invest

  1. Lower property costs make it easier for investors to get started.
  2. Tenants in healthcare, government, and education sectors offer long-term stability.
  3. Metro markets like Portland provide growth potential even in a slower statewide economy.

1031 Exchange Advantage
Maine works well for investors seeking affordable NNN properties that qualify for 1031 exchanges. It’s a practical way to reinvest gains into stable, income-producing assets.

35. Vermont

Vermont’s charm extends beyond tourism—it has niche opportunities for NNN investors. While population growth is slow and deal volume limited, markets like Burlington and Montpelier offer reliable tenants across healthcare, education, and government.

Hot Spots

  • Burlington (Chittenden County): Anchored by universities and healthcare.
  • Montpelier (Washington County): A government hub with steady commercial demand.
  • Rutland & St. Albans: Smaller cities with retail and industrial prospects.

Why Invest

  1. Reliable tenants in core sectors like healthcare, education, and government.
  2. Less competition compared to larger states.
  3. Niche metro areas that produce steady income despite slow growth.

1031 Exchange Advantage
Vermont properties can be used in 1031 exchanges, but investors should be selective due to the smaller market size and limited liquidity.

36. New Hampshire

New Hampshire is a unique NNN market—it combines the benefit of no state income tax with strong tenant demand in select cities. The challenge? Fewer properties are available, and prices can run high.

Hot Spots

  • Manchester (Hillsborough County): Anchored by healthcare, finance, and corporate tenants.
  • Nashua: Tech and service-based tenants ensure steady occupancy.
  • Concord & Portsmouth: Smaller markets with stable government and business tenants.

Why Invest

  1. No state income tax gives investors higher net returns.
  2. Tenant base is diverse, including healthcare, finance, and government.
  3. Opportunities exist in smaller but well-established commercial hubs.

1031 Exchange Advantage
NNN properties in New Hampshire qualify for 1031 exchanges, making it easier to roll capital into a tax-advantaged, income-generating market.

37. Maryland

Maryland sits in a sweet spot near Washington, D.C., with a tenant base that includes federal agencies, tech firms, and healthcare providers. While property costs are high and state/local taxes can eat into returns, the stability of tenants makes it appealing.

Hot Spots

  • Montgomery & Prince George’s Counties: Federal and corporate demand keep occupancy strong.
  • Howard County: A hub for healthcare and office tenants.
  • Baltimore (City & County): Industrial, logistics, and medical tenants dominate.

Why Invest

  1. High-income tenants near D.C. ensure dependable rental streams.
  2. Diverse economy spanning tech, healthcare, logistics, and government.
  3. Suburban markets provide long-term security.

1031 Exchange Advantage
Maryland offers properties that qualify for 1031 exchanges, giving investors a chance to shift gains into stable, high-demand markets, even if the upfront cost is higher.

38. New Jersey

New Jersey’s strong economy and proximity to New York City make it one of the most reliable NNN states. However, high property taxes and regulatory complexity mean investors must be strategic.

Hot Spots

  • Northern NJ (Bergen, Essex, Hudson): Retail and corporate tenants benefit from NYC spillover demand.
  • Central NJ (Middlesex & Monmouth): Healthcare, logistics, and education drive steady leasing.
  • Southern NJ (Camden & Gloucester): Smaller markets with retail and industrial potential.

Why Invest

  1. Tenant base is affluent and stable.
  2. Strong mix of industries, including retail, healthcare, logistics, and corporate.
  3. Strategic location between NYC and Philadelphia ensures long-term demand.

1031 Exchange Advantage
New Jersey properties are a strong fit for 1031 exchanges, offering stable cash flow, though higher taxes should be factored into returns.

39. Massachusetts

Massachusetts is a premium NNN market, led by Boston and surrounding suburbs. Strong tenant demand across healthcare, finance, and tech keeps vacancy low. High entry costs mean it’s better suited for institutional or well-capitalized investors.

Hot Spots

  • Boston (Suffolk & Middlesex Counties): Anchored by finance, tech, and healthcare.
  • Cambridge & Newton: Strong university-driven and tech-focused markets.
  • Worcester & Springfield: Affordable alternatives with healthcare and industrial demand.

Why Invest

  1. High-quality tenants with long-term leases.
  2. Diverse economy provides resilience.
  3. Metro markets combine strong cash flow with appreciation potential.

1031 Exchange Advantage
Massachusetts allows investors to use 1031 exchanges, though the high cost and strict regulations mean deals are often better suited for larger investors.

40. New York

New York is one of the most liquid and prestigious NNN markets in the U.S. NYC offers unmatched tenant demand, though costs, taxes, and regulations are among the highest in the country.

Hot Spots

  • New York City (Manhattan, Brooklyn, Queens): Financial, retail, and corporate tenants dominate.
  • Westchester & Long Island: Affluent suburbs with healthcare and retail opportunities.
  • Buffalo & Rochester: More affordable secondary markets with industrial and retail growth.

Why Invest

  1. Highly liquid market with top-tier tenants.
  2. Strong economy across finance, retail, healthcare, and corporate sectors.
  3. Long-term appreciation, even with compressed yields.

1031 Exchange Advantage
New York properties qualify for 1031 exchanges, making them an option for investors seeking stability and prestige—though high costs and strict laws require careful planning.

Bottom 10 States

41. Rhode Island

Rhode Island may be small, but its commercial markets—especially around Providence and Newport—offer reliable tenant demand. The main hurdle is limited deal flow and higher property prices compared to its size.

Hot Spots

  • Providence (Providence County): Strong demand from healthcare, corporate, and education tenants.
  • Newport: Tourism-related tenants dominate, offering steady seasonal cash flow.
  • Warwick & Cranston: Smaller but consistent retail and office opportunities.

Why Invest

  1. Attractive metro and coastal locations with stable tenants.
  2. Reliable income from sectors like healthcare and education.
  3. Smaller, niche market that appeals to low-competition investors.

1031 Exchange Advantage
Investors can use Rhode Island properties in 1031 exchanges, but careful selection is key given the limited number of quality listings.

42. Connecticut

Connecticut has one of the wealthiest tenant bases in the country, particularly in Fairfield County. However, heavy property taxes and lower yields compared to nearby states make it less appealing for cash-flow-focused investors.

Hot Spots

  • Fairfield County: Corporate headquarters, finance, and high-end retail tenants drive demand.
  • Hartford County: Insurance and government tenants ensure occupancy stability.
  • New Haven & Stamford: Education and corporate-driven leasing activity.

Why Invest

  1. Affluent markets with reliable tenants.
  2. Economic diversity across finance, education, and healthcare.
  3. Strong prestige factor, though yields are modest.

1031 Exchange Advantage
Properties in Connecticut are eligible for 1031 exchanges, offering stable long-term tenants, but the combination of high taxes and modest returns requires a conservative approach.

43. Illinois

Illinois provides access to one of the largest U.S. commercial hubs—Chicago. While tenant demand is strong, high property taxes, population decline, and restrictive landlord laws present challenges.

Hot Spots

  • Chicago (Cook & DuPage Counties): Major hub for corporate offices, logistics, and retail.
  • Naperville & Schaumburg: Established suburban markets with retail and corporate tenants.
  • Peoria & Rockford: Secondary cities with industrial opportunities.

Why Invest

  1. Access to Chicago’s deep tenant pool.
  2. Large economy with diverse industries.
  3. Opportunities for value-driven acquisitions in select suburbs.

1031 Exchange Advantage
Illinois properties qualify for 1031 exchanges, but investors should weigh the benefits of tenant diversity against higher taxes and regulatory risks.

44. Hawaii

Hawaii’s NNN market thrives on its global tourism appeal. Demand is strong in Honolulu and resort areas, but high acquisition costs, limited supply, and natural disaster risks make it a challenging play.

Hot Spots

  • Honolulu (Oahu): Anchored by tourism, retail, and hospitality tenants.
  • Maui & Kauai: Resort-heavy markets that provide steady NNN opportunities.
  • Big Island (Hilo & Kona): Smaller retail and service-sector demand.

Why Invest

  1. Tourism ensures reliable tenant demand.
  2. Unique, high-profile markets with international exposure.
  3. Secondary islands provide niche opportunities.

1031 Exchange Advantage
Hawaii’s properties qualify for 1031 exchanges, but investors must carefully account for high entry costs and geographic risks.

45. West Virginia

West Virginia offers extremely affordable NNN property pricing, but long-term growth is hindered by population decline and weaker tenant demand. Select metro areas, however, offer more stability.

Hot Spots

  • Charleston (Kanawha County): Government and healthcare tenants provide some consistency.
  • Morgantown (Monongalia County): College town economy adds resilience.
  • Huntington & Wheeling: Smaller industrial and retail opportunities.

Why Invest

  1. Very low entry costs with potential for solid yields.
  2. Pockets of stability in metro or university markets.
  3. Minimal competition, allowing selective acquisitions.

1031 Exchange Advantage
West Virginia works for 1031 exchanges, but only for investors willing to navigate the state’s overall weak growth outlook.

46. Alaska

Alaska combines a no-income-tax benefit with a very niche tenant base. The state’s remoteness, high logistics costs, and limited deal flow make it a difficult but sometimes rewarding market.

Hot Spots

  • Anchorage (Anchorage Borough): Energy, logistics, and government tenants dominate.
  • Fairbanks: Supported by military and small industrial tenants.
  • Juneau & Kenai: Smaller markets with service and retail tenants.

Why Invest

  1. No state income tax improves net returns.
  2. Government and energy tenants provide reliability.
  3. Opportunities exist in major cities for well-positioned investors.

1031 Exchange Advantage
Alaska’s properties qualify for 1031 exchanges, but careful due diligence is needed due to higher operating costs and limited market liquidity.

47. California

California is one of the most in-demand NNN markets, especially in major metros. Tenant demand is strong, but so are costs, taxes, and regulatory burdens.

Hot Spots

  • Los Angeles & Orange County: Retail, logistics, and corporate leasing activity.
  • San Francisco Bay Area: Dominated by tech and finance tenants.
  • San Diego & Sacramento: Growing healthcare and government presence.

Why Invest

  1. Tenant demand is unmatched in coastal metros.
  2. Highly diverse economy across tech, finance, healthcare, and logistics.
  3. Long-term appreciation potential in premier locations.

1031 Exchange Advantage
California offers excellent 1031 exchange opportunities for investors with capital, though high costs mean it favors well-funded buyers.

48. Mississippi

Mississippi is one of the most affordable states for NNN entry. However, economic challenges and weaker tenant quality increase vacancy risk.

Hot Spots

  • Jackson (Hinds County): Anchored by government and healthcare tenants.
  • Gulfport & Biloxi: Tourism and logistics provide demand stability.
  • Hattiesburg & Tupelo: Smaller markets with retail and industrial potential.

Why Invest

  1. Very low entry costs and decent yields in metro areas.
  2. Niche stability in select tourism-driven or government-backed markets.
  3. Minimal competition creates room for value buyers.

1031 Exchange Advantage
Mississippi properties are eligible for 1031 exchanges, but investors should be highly selective to mitigate risk.

49. Puerto Rico

Puerto Rico offers unique NNN opportunities with strong tourism demand, but hurricane exposure, tax complexity, and low liquidity make it a higher-risk option.

Hot Spots

  • San Juan: Hospitality, corporate, and retail dominate demand.
  • Ponce & Mayagüez: Smaller cities with industrial and retail potential.
  • Vieques & Culebra: Niche resort-driven opportunities.

Why Invest

  1. Strong tourism supports reliable tenant activity.
  2. Potential for higher yields in prime markets.
  3. Attractive for investors seeking niche opportunities.

1031 Exchange Advantage
Puerto Rico allows for 1031 exchanges, but due diligence is critical given the risks tied to geography and tax rules.

50. Virgin Islands

The U.S. Virgin Islands are a tiny but niche market for NNN investors, with opportunities primarily driven by tourism. Risks include hurricane exposure and very limited liquidity.

Hot Spots

  • St. Thomas: Retail and service tenants dominate.
  • St. John: Resort and boutique opportunities.
  • St. Croix: Smaller industrial and retail base.

Why Invest

  1. Tourism ensures strong demand in prime locations.
  2. Potential for high-yield boutique investments.
  3. Unique opportunities for investors seeking one-of-a-kind assets.

1031 Exchange Advantage
Virgin Islands properties qualify for 1031 exchanges, but investors must carefully weigh the risks of small-scale markets and storm exposure.

Final Thoughts

  • Best Growth & Tax-Friendly States: Texas, Florida, Tennessee, Nevada, Washington.
  • Best Low-Cost Yield States: Indiana, Alabama, Missouri, Ohio, Arkansas.
  • Prestige But Pricey: California, New York, Massachusetts, Hawaii.
  • High-Risk/Low-Growth: Mississippi, West Virginia, Alaska, Puerto Rico, Virgin Islands.

At the end of the day, the tenant and lease quality matter more than the state. A strong national tenant in a mid-tier state can easily outperform a weaker tenant in a top market.

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