Why NNN Investors Prefer Oklahoma State: Higher Growth & Competitive Cap Rates Explained
Future Holding for NNN Property Investments in Oklahoma
Triple Net Lease (NNN) properties, where tenants are responsible for property taxes, insurance, and maintenance, continue to be a favored option for investors seeking predictable income with low management obligations. In Oklahoma, the outlook for NNN property investments is strong, supported by multiple economic and market-driven factors:
1. Economic and Population Growth
Oklahoma’s steady economic expansion, particularly in cities like Oklahoma City and Tulsa, is driving increased demand for commercial real estate. Job growth in energy, aerospace, logistics, and healthcare is attracting both residents and businesses, which in turn supports the long-term viability of net lease property investments.
2. Stability and Demand for NNN Properties
The demand for NNN lease properties in Oklahoma remains robust, as these investments offer dependable, long-term income. With tenants covering the majority of operating expenses, investors can enjoy greater financial predictability. This model is especially valuable during times of economic uncertainty, providing resilience and consistent returns.
3. Market Trends and Cap Rates
Cap rates for NNN properties in Oklahoma are generally higher than the national average, offering attractive yield opportunities. Investors can expect cap rates in the range of 6% to 7.5% depending on location, tenant strength, and lease duration. These favorable returns make Oklahoma a competitive market for investors looking to balance risk and reward in their portfolios.
4. Financing Considerations for NNN Investors
Entering the NNN investment market in Oklahoma typically requires substantial capital. Investors should have a net worth of at least $1 million or an annual income exceeding $200,000 to meet the usual financing qualifications. Down payments range between 30% and 40% of the purchase price, depending on lender requirements and asset class.
5. Local Market Opportunities
Oklahoma offers a diverse range of NNN property opportunities, from single-tenant retail and QSR (quick service restaurants) to medical offices and industrial warehouses. For example, NNN-leased properties in suburban Tulsa or high-traffic corridors in Oklahoma City often come with long-term leases and built-in rent escalations. Investors can also benefit from 1031 exchange strategies to defer capital gains and reinvest in more lucrative net lease assets across the state.
Triple-net (NNN) investors are increasingly eyeing Oklahoma as a promising destination for net lease property investments. With its attractive cap rates, cost-effective real estate, and stable economic environment, Oklahoma stands out as a lucrative market for NNN brokers and investors. Here’s why the state is gaining attention:
1. Competitive Cap Rates with Strong Return Potential
Oklahoma offers cap rates ranging between 6% to 7.5%, making it an appealing market compared to more compressed cap rate states. These higher yields provide NNN investors with the opportunity to secure reliable, long-term returns from tenants with minimal landlord responsibilities.
2. Affordable Commercial Real Estate Market
The cost of acquiring net lease properties in Oklahoma is significantly lower than in many coastal or high-demand metro markets. This affordability enables investors to acquire assets leased to national brands, such as CVS, O’Reilly Auto Parts, or Family Dollar, without the premium pricing found elsewhere, resulting in higher cash-on-cash returns.
3. Economic Stability and Population Growth
Oklahoma’s economy benefits from diversified industries such as energy, aerospace, logistics, healthcare, and agriculture. Cities like Oklahoma City and Tulsa continue to grow in population and employment, creating consistent demand for essential services and retail properties, a strong foundation for net lease investments.
4. Strong Demand for Essential Retail & QSR Tenants
The state has a growing footprint of essential retail and quick-service restaurants (QSRs), including well-known tenants like Dollar General, Walgreens, Taco Bell, and Sonic (headquartered in Oklahoma City). These tenants typically sign long-term NNN leases, offering reliable cash flow and low vacancy risk for property owners.
5. Tax-Friendly Investment Environment
Oklahoma’s tax structure is favorable to investors, particularly those using 1031 exchanges to defer capital gains. The state also allows pass-through income to be treated efficiently for tax purposes when structured via LLCs, making it an attractive option for long-term wealth preservation and growth.
6. Industrial and Infrastructure Development
With its central location and robust highway and rail networks, Oklahoma is a strategic hub for distribution and industrial activity. The state’s investment in logistics infrastructure is attracting national brands and third-party logistics companies, creating demand for industrial NNN assets such as warehouses and service centers.
Income Taxes
Oklahoma’s Tax Advantages for NNN Investors: A Strategic Choice for Net Lease Properties
Oklahoma offers a range of tax benefits that make it an appealing state for triple-net (NNN) lease investors. From competitive income tax rates to favorable treatment of real estate investment income, the state provides an advantageous environment for maximizing returns on net lease properties. Here’s why NNN investors and brokers should consider Oklahoma when expanding their portfolios:
1. Favorable Tax Treatment of LLC Rental Income
Rental income earned through an LLC is treated as pass-through income in Oklahoma, meaning it is not taxed at the entity level but reported on the individual investor’s return. When structured properly, this allows NNN investors to benefit from efficient taxation and avoid double taxation on their property earnings.
2. Moderate Corporate Income Tax Rate
For investors using a corporate structure, Oklahoma imposes a flat corporate income tax rate of 4%, one of the lowest in the country. This enables corporations to retain more earnings and reinvest in additional NNN properties or property upgrades, increasing long-term value.
3. Competitive Personal Income Tax Rates
Oklahoma’s personal income tax system is structured with brackets that favor both mid- and high-income investors:
0.25% on the first $1,000 of taxable income
Gradually increases across brackets
Top marginal rate: 4.75% on taxable income above $7,200 (single) or $12,200 (married filing jointly)
This relatively low top rate helps individual investors keep more of their net lease income, especially when compared to other investment markets.
4. No State-Level Estate or Inheritance Tax
Oklahoma does not impose a state estate or inheritance tax, making it an ideal location for long-term wealth preservation. Investors can pass on NNN properties to heirs without additional state tax obligations, simplifying generational estate planning and asset transfers.
5. Low Property Tax Rates
With an average effective property tax rate of approximately 0.80%, Oklahoma remains an affordable state for holding real estate assets. Lower property tax obligations reduce carrying costs for NNN investors, supporting better cash flow and enhancing investment profitability over time.
6. Capital Gains Taxed as Ordinary Income
Oklahoma does not have a separate capital gains tax. Instead, capital gains are taxed as ordinary income under the state’s personal income tax structure. This straightforward treatment simplifies financial planning for NNN investors executing a sale or participating in a 1031 exchange.
Investing in NNN properties in Oklahoma offers a strategic opportunity, especially in areas with rapid population growth and strong economic foundations. Tenants take on all property taxes, insurance, and maintenance, delivering a passive income experience for investors. Based on recent demographic and economic trends, here are the top Oklahoma counties and metro areas ideal for NNN property investments:
1. Canadian County (Oklahoma City Metro):
Population Growth: Canadian County has seen explosive growth, with a 21.6% increase from 2020 to 2025, the fastest-growing in Oklahoma.
Economic Development: The area benefits from OKC’s suburban sprawl, as well as rising demand in logistics, light industrial, and housing sectors.
Investment Potential: Excellent market for NNN properties, including industrial warehouses, essential retail, and service-based tenants.
2. McClain County (South OKC Suburbs – Purcell, Newcastle):
Population Growth: One of the top three fastest-growing counties in Oklahoma, with significant net in-migration and housing activity.
Economic Development: Driven by residential development, highway access (I-35), and new retail infrastructure.
Investment Potential: Ideal for QSRs, dollar stores, medical clinics, and neighborhood retail serving fast-growing suburban populations.
3. Wagoner County (Tulsa Metro – Broken Arrow, Coweta):
Population Growth: Strong population gains, especially in suburban areas adjacent to Tulsa.
Economic Development: Growing retail corridors, school expansions, and family-friendly housing attract national tenants.
Investment Potential: NNN opportunities in grocery-anchored centers, fast food, and healthcare-focused retail.
4. Cleveland County (Norman, Moore—South OKC Metro):
Population Growth: Home to over 300,000 people, this county continues to see a steady uptick in residents, particularly young professionals and families.
Economic Development: Anchored by the University of Oklahoma, plus growth in biotech, education, and medical sectors.
Investment Potential: Consistent demand for student housing retail, pharmacy tenants, and medical office properties.
5. Tulsa County (Tulsa Core – Midtown, South Tulsa):
Population Growth: Tulsa County remains one of the most densely populated areas in Oklahoma, with over 660,000 residents.
Economic Development: Major employers in energy, aerospace, and manufacturing, as well as a growing startup scene.
Investment Potential: Prime NNN locations for urban retail, national chains, and office-to-retail conversions.
6. Rogers County (Claremore – Northeast Tulsa Metro):
Population Growth: Experiencing strong residential inflow, especially in areas surrounding Claremore and Catoosa.
Economic Development: Investments in transportation, education, and local healthcare services are increasing.
Investment Potential: Opportunities in essential retail, regional banks, auto service, and daycare/education-based tenants.
Pros:
1️⃣ Higher Cap Rates
Oklahoma typically offers cap rates in the range of 6%–7.5%, which are favorable for NNN investors looking to maximize return on investment. These higher yields create stronger cash flow opportunities, especially compared to more compressed markets.
2️⃣ Tax-Efficient Rental Income
Rental income earned through an LLC in Oklahoma is treated as pass-through income and not taxed at the entity level. This structure can help investors reduce their overall tax burden when properties are held correctly.
3️⃣ Reasonable Property Tax Rates
Oklahoma has an average effective property tax rate of about 0.80%, lower than many other states. This helps reduce long-term operating costs for NNN property owners.
4️⃣ Affordable Entry Prices
Commercial real estate in Oklahoma is more affordable, allowing investors to enter the NNN market without the steep capital requirements found in higher-cost urban areas. This supports stronger initial returns and broader portfolio diversification.
5️⃣ Growing Population & Economic Base
Cities like Oklahoma City, Tulsa, Norman, and Edmond are experiencing steady population and job growth. Oklahoma’s economic base includes energy, aerospace, logistics, and healthcare, driving consistent demand for retail and industrial space.
6️⃣ Business-Friendly Regulatory Climate
Oklahoma is known for its pro-business environment, with low corporate income tax (a flat 4%) and favorable zoning and permitting processes. This encourages tenant expansion and long-term lease stability.
7️⃣ Strong Presence of Essential Tenants
Oklahoma supports a wide range of essential retail and QSR tenants, including Dollar General, CVS, Walgreens, Sonic (HQ in Oklahoma City), Taco Bell, and auto parts retailers. These tenants typically sign long-term leases and offer predictable income streams.
Cons:
1️⃣ Slower Real Estate Appreciation
While Oklahoma offers high cash flow, property appreciation tends to be modest compared to booming metros in coastal or Sun Belt states. Investors prioritizing capital growth over income may need to manage expectations.
2️⃣ Tenant Demand Can Vary by Location
Major metros like Oklahoma City and Tulsa are strong markets, but rural or outlying areas may face weaker tenant demand. Due diligence is essential to ensure stable lease structures and tenant quality.
3️⃣ Severe Weather Risks
Oklahoma is located in Tornado Alley and experiences frequent storms and wind damage. This may increase insurance premiums and occasionally affect tenant operations or lease negotiations.
4️⃣ Limited High-End Retail Opportunities
Oklahoma’s retail market is largely driven by essential services and mid-market brands. Investors seeking luxury retail or urban lifestyle centers may find limited options.
5️⃣ Economic Dependence on Energy Sector
While diversified, Oklahoma’s economy is still partially dependent on oil and gas, which can lead to localized volatility in employment and commercial real estate demand during downturns in energy prices.
Oklahoma NNN Properties for 1031 Exchange
Invest in Free Standing Single Tenant Triple Net (NNN) Properties in Oklahoma
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At Triple Net Investment Group, we specialize in the sale of single tenant NNN properties and triple net shopping centers across the United States. Our team is dedicated to helping investors find high-quality (Tenant Triple Net) NNN properties in Oklahoma and nationwide that align with their financial goals and 1031 exchange requirements.
With our in-depth market knowledge and personalized service, we provide tailored investment strategies for both buyers and sellers of commercial real estate. Whether you’re looking to defer capital gains through a 1031 tax-deferred exchange or want to diversify your portfolio with income-generating assets, our team offers a wide selection of vetted NNN investment properties.
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