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Top 10 Reasons Why Net Lease is the Best Commercial Real Estate Investment

Why Invest in the Net Lease Market?

Investors choose to invest in net lease properties for several reasons. Net lease assets offer a reliable source of fixed income with little to no management hassles.  These investments tend to be long term and have investment grade tenants that reduce risk and the often include rent increases which benefit the investor.  Further, with certain properties, as with other commercial real estate, the property itself may become a generational investment that overtime, due to the location, significantly increases in value on top of the income flow.
Amanda WillisTop 10 Reasons Why Net Lease is the Best Commercial Real Estate Investment

Mergers Re-Align Convenience-Store Rankings

M&As dominate the headlines for the convenience-store (C-Store) sector. For instance, 7-Eleven, offering everything from Big Gulps to gas (that is not a comment on their food offerings) now tops the list of stores by number since it bought some 1,000 units from Sunoco last year. With a AA-minus credit rating, 7-Eleven now operates 9200 shops.

Speedway comes in at #3, with 3900 stores, more than 1000 of which were picked up from Andeavor, and it boasts a BBB credit rating. (Interestingly, the transaction knocked Andeavor off the list entirely. It was #7 last year.) EG Group secured this year’s …

Amanda WillisMergers Re-Align Convenience-Store Rankings

The Net Lease Resolution for 2019: Expect More of the Same

Unlike most of us, there was no rich celebration of the new year for the net lease sector. No massive resolutions, in fact, not much change at all. If there is a watchword for 2019, it seems to be expect more of the same, at least in terms of the cap rate picture.

In fact, as we pointed out in our most recent quarterly report, tracking the single tenant net lease cap rate against the 10-year Treasury, both have been virtually flat going back to the fourth quarter of 2016, and of the two, cap rates were the flatter! The

Amanda WillisThe Net Lease Resolution for 2019: Expect More of the Same

STNLs–A Win-Win Lease Structure for Tenant and Owner Alike

It’s official. The National Real Estate Investor just dubbed the Single-Tenant Net Lease sector “the bedrock of commercial real estate investment.” What’s more, the commercial real estate website went on to predict that “all signs point to the sector remaining in solid shape for the foreseeable future.”

Little wonder. There are subtle nuances to the STNL structure that make it stand out from, and in many respects ahead of, more traditional leases–making it a very appealing fit for investors as well as for creditworthy tenants.

As the name implies, the focus of the STNL is on a single tenant or

Amanda WillisSTNLs–A Win-Win Lease Structure for Tenant and Owner Alike

3 Reasons to Invest in a Triple Net (NNN) Lease

Think about any free-standing business—pharmacies, banks, your local Starbucks—and there’s a good chance they’re under a triple net lease agreement. THere is also a good chance that these could be investment properties for sale.  Also known as NNN leases, this subcategory of net leases tends to be the most commonly utilized net lease agreement for commercial and retail space, and for good reason.…

Amanda Willis3 Reasons to Invest in a Triple Net (NNN) Lease

Federal Interest Rates and the Impact on Net Lease

The Federal Reserve raised interest rates on Wednesday, June 13, 2018 and signaled that two additional increases would occur by year’s end. Officials believe the economy to be strong enough to withstand the rise in borrowing costs without stunting the economic growth we’re experiencing.  So how does this impact net lease?

The Fed has long aimed for 2 percent inflation, a rate recognized as a key level to a healthy economy. The United States economy has increased significantly from the 2008 to what professionals call a “normal” level. The most recent increases are part of a series of steps to …

Amanda WillisFederal Interest Rates and the Impact on Net Lease

Why do Triple-Net Financial Investments?

Many free-standing, specialized buildings are leased to household name brands under a triple net lease agreement. Some examples of these include CVS Pharmacy, Taco Bell, Dollar General, Wells Fargo Banks, and more. In a NNN lease agreement, the tenant is solely responsible for all the costs related to the asset being leased. This would include net real estate taxes on the asset, the net building insurance, and any net common area maintenance, in addition to the rent. The tenant is therefore responsible for all the property’s expenses, both fixed and operating.

There are many benefits of running a triple net …

Amanda WillisWhy do Triple-Net Financial Investments?

Net Lease as an Alternate Fixed Income Revenue

There are many forms of a net lease, ranging from single to triple. The differences between the three all lie within the expenses that the tenant is responsible for paying on the asset. The three categories in question are taxes, insurance, and maintenance costs. In a single net lease, the tenant pays only one of the three expense categories. In a double net lease, the tenant is responsible for paying for two of the expenses. And a triple net lease requires the tenant to pay for all three of the expense categories. Regarding the single and double net leases, it …

Amanda WillisNet Lease as an Alternate Fixed Income Revenue

Assessing the Risk and Return Profile

Defining the pattern and sources of return for commercial real estate as a distinct asset class is important, but investors typically hold portfolios of properties that differ markedly from the broad asset class1.

Real estate investors often employ significant amounts of leverage, may concentrate their holdings in a few properties or locales, or take on higher-risk development projects. These activities, alone or together, can transform a low-risk, income-oriented portfolio into a high-risk, appreciation-oriented holding, with important implications for asset allocation. Generalizing about real estate as an asset class may be inadequate when advising clients about their specific holdings …

Amanda WillisAssessing the Risk and Return Profile