CRE Investors Find Safety in Triple Net Lease Properties

Posted on June 09, 2020

Government-mandated business closings and quarantine orders resulting from the COVID-19 pandemic emptied many multi-tenant commercial properties and put at risk the rental income investors rely on for cash flow. This may not necessarily be the case for investors in triple net lease (NNN) properties, especially those with single tenants considered essential businesses.

In general, NNN properties are less risky for investors because they typically involve longer lease terms with built-in rent increases. In this sense, triple net leases tend to be more permanent arrangements than apartment or office-space rentals. High credit-quality, investment-grade tenants bear the responsibility of paying for and managing the properties’ operating expenses, taxes, repairs and maintenance, relieving landlords/investors of the time and expense required to handle these obligations. Property owners/investors also have the leverage to work with tenants who are facing difficulties meeting rent payments, allowing them temporary forbearance, as needed, in return for extended lease terms or other value-added concessions.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.