NNN Commercial Real Estate for Sale
Real estate investors and property owners are turning to NNN commercial real estate for sale instead of traditional investment properties. An NNN lease, also referred to as a triple net lease, is a type of real estate lease agreement where the tenant who rents the property is responsible for the expenses to keep up the property, such as real estate taxes, insurance, maintenance, and more. These are expenses that are usually paid for by the property owner in a traditional landlord/tenant relationship.
If you are considering NNN commercial real estate investment, contact Avison Young’s Net Lease Group to discuss the types of properties we have that would be fit the type of commercial real estate investment you are looking for. In the meantime, the following is a brief overview of NNN commercial leases.
Net Lease Commercial Leases
In traditional commercial real estate, the type of lease that is usually signed between the landlord and the tenant is referred to as a gross lease. In this type of agreement, the landlord is typically responsible for the real estate taxes, property liability insurance, maintenance, and repairs.
In a single net lease, the tenant is responsible for one of the normal property expenses, usually the property taxes. In a double net lease, the tenant is responsible for two expenses, sometimes the property taxes and the property liability insurance. In a triple net lease (also referred to as a NNN commercial lease), the tenant is responsible for all expenses including the property taxes, the property liability insurance, and the maintenance and upkeep of the property.
NNN commercial real estate leases are usually used for commercial buildings that are freestanding. There is typically only one tenant (STNL) that rents the building and the initial term of the lease is usually for 10+ years. These long term leases also provide options after the initial lease term that keep the tenant in place for a longer period of time at an increased rent.
What Are the Benefits of NNN Commercial Real Estate?
Investors and landlords prefer triple net leases because of the many benefits they offer. NNN leases provide a predictable and steady income with their long term leases. Many investment property owners can attest to how unpredictable gross leases can be with their much shorter lease period that often leads to frequent tenant turnover. This turnover also often means months of vacancy with no rental income.
NNN commercial real estate is also beneficial because the tenant is responsible for the expenses that often fluctuates from year to year, such as the real estate taxes and property insurance. The tenant is also responsible for maintenance and repairs, two expenses that often cut into the profit of a commercial real estate property.
Since the tenant is responsible for all of these expenses, NNN commercial real estate lets investors and landlords know exactly how much income the property will be generated each month because there are never unpredictable expenses. Essentially, there are no expenses to run the property at all.
Investors and property owners also do not have to deal with negotiating rent increases and lease renewals because these long-term leases have those rent increases built right in.
NNN commercial real estate is a win/win for investors and property owners. If you would like to learn more about our listings and how you could purchase NNN commercial real estate. Contact our experts today to help find the right property for your investment criteria.