Triple Net Lease Investing

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Triple Net Lease Investing… courtesy of Investopedia 


Triple net leased properties have become popular investment vehicles for investors seeking steady income with relatively low risk. Triple net lease investments are typically offered as a portfolio of properties consisting of three or more high-grade commercial properties that are fully leased by a single tenant with existing in-place cash flow. The commercial properties could include office buildings, shopping malls, industrial parks, or free-standing buildings operated by banks or restaurant chains. The typical lease term is for 10 to 15 years, with built in contractual rent escalation.

The benefits for investors include long-term, stable income with the possibility of capital appreciation of the underlying property. Investors can invest in high-quality real estate without concern for management operations, including vacancy factors, tenant improvement costs or leasing fees. When the underlying properties are sold, investors can roll their capital into another triple net lease investment without paying taxes, through a 1031 tax-deferred exchange.

Investors in direct triple net lease investment offerings must be accredited, requiring at least $1 million net worth, excluding the value of their primary residence, or $200,000 of income ($300,000 for joint filers).

 

 


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