What is single-tenant NNN?

A Single-Tenant Triple-Net property (also known as “Net-Lease”, “STNL” or “NNN”) refers to a property which is 100 percent leased to one tenant with a lease structure in which the tenant is responsible for all property-related expenses, leaving the landlord with minimal responsibilities.

What is the difference between a single net and a triple net lease?

In a single net lease, the tenant pays a lower base rent in addition to property taxes. Double net leases include property taxes and insurance premiums, in addition to the base rent. A triple net lease includes property taxes, insurance, and maintenance costs, in addition to the base rent.

What does NNN mean in a lease agreement?

triple net lease
An NNN lease is the most common type of commercial lease and is commonly called a triple net lease. On an NNN lease, tenants pay additional expenses in addition to the lease fee, to the landlord or lessor. The NNN fees includes property taxes, property insurance and common area maintenance for a building (CAM).

Is a NNN lease good?

NNN leases are considered to be one of the most secure investment opportunities. This is because, similar to bonds, single-tenant net-leased properties provide steady and predictable returns over time.

What is the best NNN investment?

NNN properties with tenants who are operating “recession-proof” businesses usually represent the best long-term opportunity for investors….Recession-Proof Business

• Gas Stations.
• Convenience Stores.
• Dollar/Discount Stores.
• Grocery Stores.
• Medical Facilities.

Who pays for a new roof in a triple net lease?

As the triple net property owner (unless otherwise specified in the NNN lease), you’ll generally be responsible for maintaining and repairing these 3 main aspects of your building: Roof (repairs, maintenance, upgrades) Exterior Walls. Utility Repairs and Upkeep (for major things such as plumbing and electricity)

How is NNN lease rate calculated?

Lease Rate: $20.00 /SF NNN (Estimated NNN = $3.25/SF), meaning the base rental rate is $20.00 per square foot per year and the property expenses, which include property taxes and insurance, are estimated to be $3.25 per square foot per year, though they can fluctuate from year to year.

Does NNN lease include utilities?

A triple net or NNN lease is one where the rent is quoted as a base rent net of, or not including, the expenses for real estate taxes, building insurance and common area maintenance. Under a NNN lease, the tenant will also be responsible for utilities in addition to the NNN expenses.

What is a NNN investment?

A triple net lease (triple-Net or NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property including real estate taxes, building insurance, and maintenance.

Who is responsible for repairs in a triple net lease?

tenant
With a Triple Net Lease—sometimes referred to as “NNN”—the tenant assumes responsibility for all costs of the property, in addition to paying the rent. The tenant pays the utilities, real estate taxes, building insurance, and maintenance.

What does a NNN mean in a triple net lease?

The NNN refers to the nature of the triple net lease, which requires the tenant to pay (in addition to the rent) property taxes, insurance, and maintenance on the property. STNL investments are appealing because they require limited ongoing landlord responsibilities, and provide the owner with a long-term predictable stream of rental payments.

Can a single tenant net lease be an investment?

Single Tenant Net Lease (STNL) properties are a popular option, particularly for investors doing a 1031 exchange who no longer want the day-to-day burden of being a landlord. STNL properties can be great investments, but they aren’t without risk.

What kind of tenants are in a NNN?

NNN tenants span across a variety of property types including office and industrial, but are most prevalent with retail properties including fast food restaurants, convenience stores, gas stations, and big box stores.

What’s the difference between a single and double net lease?

A single net lease requires tenants to pay property taxes in addition to rent, and a double net lease typically tacks on property insurance. Triple net leased properties have become popular investment vehicles for investors seeking steady income with relatively low risk.