A triple net (NNN) lease is an increasingly popular form of a rental agreement between tenants and landlords or investors for commercial real estate. Though a majority of the financial responsibilities fall on the tenant, NNN leases are still heavily favored and preferred, even when compared to other variations of net lease agreements. NNN leases present several benefits to tenants and investors alike, which makes them ideal opportunities for the new or seasoned investor. Below are four reasons to consider investing in NNN lease properties.
NNN Lease Properties Require Minimal Management
A NNN lease puts almost all of the financial burden in the hands of the tenant. By definition, NNN leases require very little management from the investor, as the tenant is responsible for the agreed upon rent as well as the property insurance, property taxes and property maintenance.
This simplicity and lack of financial obligation is beneficial for investors, but these terms also provide a sense of control to the tenants. Occupants do not need to wait weeks on general property maintenance from an overwhelmed landlord and enjoy the greater autonomy offered by a NNN agreement.
NNN Lease Properties are Favored by Reliable Tenants
NNN lease properties are often chosen by secure, reliable tenants, as they are aware of the responsibilities they incur. Tenants that favor NNN lease properties frequently include retailers such as gas stations, mattress outlets, fast-food restaurants, convenience stores and grocery stores.
Multi-tenant property sets prefer NNN leases because the rents tend to be lower. Additionally, with the responsibility of property insurance, taxes and maintenance, the business owners have the incentive to keep costs low. These types of tenants allow investors to comfortably offload the burden of the additional property expenses while maintaining a dependable and steady source of income.
NNN Lease Properties are Stable Investments
The stability and predictability of NNN investments are appealing for both parties entering the agreement. The structure of a NNN lease is known from the outset, and the entities that prefer NNN leases provide predictable sustainability and accountability for the well-being of the property itself. Additionally, the typical occupants of a NNN property are often impervious to the effects of the rise of e-commerce, which facilitates long-term rental agreements and builds quality relationships between tenants and landlords.
NNN Lease Properties Diversify an Investment Portfolio
NNN leases are integral components of any sophisticated investment portfolio. These types of properties are typically low-risk and tend to deliver passive, steady income with little to no management required. A long-term, stable, but potentially lucrative asset into a portfolio allows an investor to achieve an imperative balance dynamic. Additionally, acquiring a NNN leased property provides an investor with the ability to focus on other high-risk, hands-on investments. These attributes of a NNN lease property simplify the process of investment portfolio diversification, which is essential to avoiding market fluctuations.
Interested in commercial real estate investment? Ground + Space is a leading commercial real estate brokerage firm that specializes in single-tenant and retail NNN investments. Contact us today to find out more about our current listings!