Calkain offers a variety of NNN listings for sale. What distinguishes this type of real estate is that a triple net lease (NNN) is a lease where the tenant agrees to pay a monthly lump sum base rent as well s the property taxes, the property insurance, and the maintenance. It’s also known as a “bond lease” or “absolute triple net lease.” When anything shifts back to being the responsibility of the owner, that changes, and typically, the roof or structure is the most common maintenance item to remain the owner’s responsibility, thus shifting this type of asset to a double net (NN) investment.
There are many variations to net lease investments, including a modified net lease and a modified gross lease. The modified net lease is a compromise between the gross lease and the triple net. This becomes a hybrid where the owner and the tenant agree to split maintenance costs, while the tenant is still responsible to pay taxes and insurance. Utilities are yet another expense that often are on the negotiating table with a modified net lease.
A modified gross lease is a form of the lease where the landlord/owner generally pays for the base yearly property taxes and building insurance. In general, tenants are responsible for their share of common area maintenance (CAM) and common area utilities.
So how do you decide which type of investment to pursue when you are evaluating NNN listings for sale? The triple net lease (NNN) is generally the best option and is highly sought after for the simple benefit of no landlord responsibilities.
There are also several ownership types for triple net lease investments that you should understand before reviewing available NNN listings. The law recognizes a “Fee Simple” ownership as the highest form in real estate. Fee simple is ownership of both the land and the building, and the investor has full entitlement to the property limited only by zoning laws, deed or subdivision restrictions or covenants.
A Ground Lease is another type of ownership, and simply put, it is where the investor/landlord owns only the land. He or she can then lease out the area for building construction. In its most fundamental form, a ground lease separates land ownership from the ownership of the improvements on the land, such as a shopping center or free standing building. And for that reason, most ground leases are generally very long term, occasionally up to 100 years.
The last type of ownership for NNN listings is a leasehold. In the commercial real estate sector, leasehold refers to the right to hold or use a building for a fixed period of time at an agreed upon price without transfer of ownership. In other words, leasehold refers to the structure only, not the land upon which it’s built. The lease agreement spells out the rights and obligations of both the landlord/owner and the tenant. This is the opposite of a ground lease. All types of ownerships offer different benefits to owners when considering NNN listings.
When looking to invest in NNN properties, it’s best to work with brokerage firms such as Calkain who specialize in net lease and can match the NNN listings to your investment criteria and goals. As you are looking at opportunities to invest, you will want to ensure you know if you are getting into a NN or NNN investment, and understand if it’s an investment grade tenant with a proper lease structure that supports a hands-free management style, and fully understand the type of ownership you are undertaking. Calkain currently has a variety of NNN listings available on our site that cover a variety of investment criteria. Make sure to review our NNN listings at www.calkain.com/properties.NNN Listings