8A — March 13 - 26, 2020 — 1031 Exchange — Financial Digest — M id A tlantic Real Estate Journal 14A — March 13 - 26, 2015 — M id A tlAntic Real Estate Journal
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By Alan Fruitman, 1031tax.com The NNN Triple Net Property Book By Geoff Hauer, 1031tax.com NNN Prope ty – A Safe Harbor in a Stormy Economy
Y ou will experience tre- mendous enjoyment owning NNN proper- s inds of change in the economic cycle grow, investo s in- A
(having year-to-year leases and fixing roofs, plumbing and toilets), reading The retur s over long r periods. The nature of NNN ropert es, their leas terms and tenant profiles provide added security for investors looking to ride out the storm of challenging economic conditions. The real estate fundamentals of NNN properti s provide the first line of security. NNN properties typically have high- traffic, high visibility locations which appeal to a broad range of p ospective tenants. NNN properties often have stylized box buildings with regular site layouts and ignage rights. These features help occupying NNN Triple Net Property Book would be a waste of your time. There is a reason both va- nilla & chocolate ice cream are top sellers. Even though people consider vanilla to
be plain and perhaps bor- ing, they still enjoy it. As- suming this analogy is true, usinesses maintain viable operations through economic cycles and appe to a multi- tude of tenants or buyers on the lease turn or disposal of the asset. NNN properties offer a sec- ond line of security in their long leas durations and lease terms. NNN property leases range from 5 - 20 years, often with rent increases through- out. These timeframes span economic cycles providi g sta- ble or escalating i come over time. They provide attractive ret rns rela ive to government and co pora e s curiti s and comparing a single-tenant NNN property to vanilla ice cream would be reasonable. For example, when you take a bite of vanilla ice cream, you know it will taste good, even predictable. When you
own a NNN property, your monthly income stream will be quite good; it will also be 100% predictable. To complete the analogy, let’s associate chocolate ice cream with a multi-tenant prop- erty with short-term leases. Examples of multi-tenant property include apartment buildings, shopping centers, or office buildings. Income from a multi-tenant prop- erty will vary each year and it will take a signifi- cant amount of your time to manage and maintain the property. Again, some people avoid the volatility of equity arkets. The hird line of securi- ty comes from the nature of the tenan s occupying NNN properti s. Ten nts typic lly consist of publicly traded com- panies or st ong priv t ly held companies. The corpor te- back d nature of NNNprop rty leases reduces vacancy risk for investors. Should an occupying business fail, NNN pro erty lease terms obligate t e ten- t to continue rent payments through t the lease term. Only a corporate bankruptcy can void the lease, which,
prefer vanilla, others prefer chocolate. It’s nice to have options. Here’s why many investors enjoy owning single-tenant NNN property. NNN is a type of lease in which the tenant maintains and pays for all property maintenance, taxes and insurance. Ten- ants include Walgreens, CVS Pharmacy, Chase Bank, Wells Fargo, Chipotle, Pane- ra, McDonald’s, Dollar Gen- eral, Home Depot, Wal-Mart, AutoZone and almost every other national retailer you see while driving through the most prime retail corridor near your home. Landlords are mostly individual real es- tate investors, just like you. Here’s the best part – These Fortune 500 tenants sign long-term leases that range from 10 to 25 years. The price to purchase a NNN prop- erty begins at approximately $1,000,000. To make a long story really short, owning a NNN property gives you the freedom to work on your day job, travel or do things other than worry about your real estate investment. The reason you are reading this article is because you want to learn more about NNN property. There are random articles and piec- es of information scattered throughout various news- papers and websites. The reason I wrote The NNN Triple Net Property Book is to provide concise and qual- ity information to real estate investors like you. Chapters in The NNN Triple Net Property Book range from Passive vs. Ac- tive Income, Location Mat- ters, Two Happiest Days of Owning a NNN Property, Build a Diversified Portfo- lio, High Leverage = Risk, Which States Should You Target or Avoid, Is an Envi- ronmental Problem a Deal Breaker, The Process & the Property, Franchise vs. Cor- porate Lease, Pros and Cons of a Ground Leased Property, What Is a Letter of Intent, Four Reasons Why Investors Utilize 1031 Exchange, and References Matter. Visit the 1031tax.com web- site or call Alan Fruitman at 1-800-454-0015 to receive a list of available NNN prop- erty and a complimentary copy of The NNN Triple Net Property Book. n whil not a zer -c ance risk, is a low r probability event that is easier for investors to assess than the vaca cy risk seen across reside tial, office or industrial roperties occupied by non-credit-worthy tenants. M y NNN property tenant are in recession-resistant busi- ness verticals. Fast food chains, dollar stores and auto r pair/ auto part stores all ben fit from th “flight to affordability” that occurs as consumers seek out value menus, chase deals on daily nec ssities and witch to “do-it-yourself” mode. This is evident in historical financials: McDonalds had 3.8%, 5.0% and 5.6% c mparabl store sale g owth in 2009, 2010 and 2011. AutoZon had 6.6%, 5.4% and 6.3% and Dollar Tree had 4.1%, 6.3% and 6. % comparable store sales growth across th sa e period. NNN prop rty tenants are often well capit lized and have efficient operations th t are able to withstand sl er eco- nomic conditions. For instance, ast f od operators have finel tuned business perations and employ cutting-edge supply chain a d customer experi- ence automati n. These te - ant e skilled at managing cost and optimizing customer experience, making them well positi ned to maint in profits a the econo y falters. Since NNN p operties are well-suited to ride-out tough economic times, many inves- tors choose to se k out these pro ert es as equity markets become less-certain. Working with a trust d advisor such as t e brokers of 1031tax.com will increase the chance of find- ing the optim l combination of property, tenant and le se o provide the best security/ return mix. With billions of dollars in nationwide NNN property transactions, span- ning multiple economic cycles, the broke s of 1031tax.com are highly skilled at identifying the best NNN oppo tunities and guiding clients to a successful cl sing so they can ride out the next st rm in relative c mfort. Geoff Hau r is an inde- pendent real estate broker and part of 1031tax.com. Visit 1031tax.com or call Geoff a 1-800-454-0015 x6 to receive nationwide list of NNN properties and learn more about our comprehen sive gui e on investi g in NNN properties: he N N T i l Net Property Book.
ty and ben- efit greatly by reading T h e NNN Tr iple Net P r o p e r t y Book if your goal is to re- ceive passive income (no c r e a s i n g l y seek saf har- or in NNN pr ope r t i e s . NNN proper- ties in their purest form a r e i n g l e t nant prop- ert i es wi th
“The reason I wrote The NNN Triple Net Property Book is to provide concise and quality information to real estate investors like you”
Alan Fruitman Geoff Hauer
property management or vacancy) from your real es- tate investments. However, if managing your apartment building is still enjoyable credit-worthy tenants, long- term leases and no landlord responsibilities. Capitalization rates ofte range from 4% to 7%, provid ng investors st
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