Evaluating Triple Net Lease Properties by Chris Sanz, JD, LLM

Posted on August 11, 2021

Triple net leases (NNNs) are attractive investments because they can provide a steady stream of consistent, passive rental income without requiring investors to pay property fees or become mired in the day-to-day operations and management of the real estate. However, not all NNN properties are created equal. Following are three critical factors to consider when evaluating NNN property.

Physical Location: Ultimately, look for property located in a city or town with a growing population and upward job growth where potential customers will continue to swell over your tenants’ lease terms. On a more micro level, look for properties that are visible and easily accessible from main roads with ample parking and other features tenants and customer may demand, such as drive-though services.

Tenants: You want tenants that will attract customers and regular foot traffic, even in times of economic hardship. Look for anchor tenants with good credit quality that offer essential goods and services, such as groceries, pharmacies, gas stations, convenience stores and even established restaurant chains, that will continue to be in demand during a recession (or even a pandemic) and be able to pivot as needed to meet consumer demands.

Get Expert Help: Because property location and tenant selection are so critical to investment performance, there’s no reason why you wouldn’t want to work with experienced professionals with a deep network of national tenants and a proven track record of success.