Net Leased Investments
Net Leased Investments are specialized types of Commercial Investment Real Estate.
Net Leased Investments usually refer to single-tenant properties (although they
can be multi-tenant properties) which are leased by long-term, credit worthy tenants.
The
term “Net Leased” is also referred to as “Triple-Net Leased” and
means that the rent received by the property owner/investor is “Net,” or
separate, of real estate taxes, property insurance and common area maintenance
(CAM) charges. With a Net Leased Investment the property owner/investor is NOT
responsible for ANY costs of maintaining the property; the tenant is responsible
for these expenses in addition to the rent.
Net Leased Investments are highly desirable
because the property owner/investor has NO property management responsibilities
whatsoever! Also, as Net Leased Investments
are typically leased to large, publicly traded corporations with strong credit
ratings for very long periods of time (10-20 years is common) they are considered
very secure investments. Since Net Leased Investments are so secure and there is
a plentiful stock from which to choose, Net Leased Investments are often used to
satisfy 1031 Exchange transactions, also known
as Tax-Free Exchanges.
Why Are Net Leased Investments Considered Secure?
Net Leased Investments are often
leased to Investment Grade tenants: large corporations with a high credit rating
and guaranteed by the credit worthy parent corporation.
In addition to the long term lease signed by the tenant, the tenant takes care
of all costs of maintaining the property including property taxes, property insurance
and property maintenance (the three “Nets”). Buying a Net Leased Investment
is like buying a secure corporate bond with property ownership tax benefits.
Why
Are Net Leased Properties Easy To Purchase?
Net Leased Investments are easy to
purchase first because large corporations requiring multiple locations nationwide
(such as Walgreens or Office Depot) are
typical tenants
found in Net Leased Investments thus creating a continuous supply of available
properties. Second, since the large corporations who occupy Net Leased Investments
do a significant amount of sophisticated market research prior to committing
to a location, the property owner/investor has little investigation to perform.
Third,
for those who require financing, there is an extensive network of mortgage
sources for Net Leased Investments.
Planters Realty maintains one of the most extensive
databases of Net Leased Investments nationwide, available for search free,
exclusively
for Planters Realty clients. |
