I'm not sure at this point. The general questions I have would narrow the choices. I lean towards large corporate leases, such as burger kings,and drug stores. The cap rates seem low, but so are apt buildings at the moment.
Cap rates for a drugstore should be around 8-10 percent. for a Single tenant NNN lease to a credit tenant this is a pretty good deal. Most have leases of up to 20 years with several options to renew and teh tenant takes care of everything. The barrier to entry is somewhat high with Drugstores starting out around $1,000,000 but other opportunities exist with such chains as Dollar Stores that sell for around $500,000. Contact me for more info.
Thanks for the replies. What I'm interested in is the historical return of these investments relative to interest rates and ROI. Real estate is cyclical, and correspondingly, NNN deals should be as well. Stock market losses in recent years have skewed the apartment market. How has this affected the cap rates for NNN deals?
I took a good look at single tenant NNN deals because I just sold a 4-plex and wanted to get away from active property management. With the single tenant deals, it should be looked at much like a bond or an annuity. You plunk down your money and get a monthly payment. The property is, in my opinion, depleted as time passes. How many Arbys do you know that are in a 20 year old building. The single tenant also puts the brakes on appreciation. After looking at this for 6 months, I chose to put the money into a tenant in common (TIC) that gives you fractional ownership of a class A building that is professionally managed for NNN returns with many tenants. You can now use this type of property for a 1031 exchange going from residential rentals. Hope this adds to your information to consider.
Sure, this is what we do all the time in the commercial business. What are you planing to NNN lease?
I'm not sure at this point. The general questions I have would narrow the choices. I lean towards large corporate leases, such as burger kings,and drug stores. The cap rates seem low, but so are apt buildings at the moment.
Cap rates for a drugstore should be around 8-10 percent. for a Single tenant NNN lease to a credit tenant this is a pretty good deal. Most have leases of up to 20 years with several options to renew and teh tenant takes care of everything. The barrier to entry is somewhat high with Drugstores starting out around $1,000,000 but other opportunities exist with such chains as Dollar Stores that sell for around $500,000. Contact me for more info.
Thanks for the replies. What I'm interested in is the historical return of these investments relative to interest rates and ROI. Real estate is cyclical, and correspondingly, NNN deals should be as well. Stock market losses in recent years have skewed the apartment market. How has this affected the cap rates for NNN deals?
I took a good look at single tenant NNN deals because I just sold a 4-plex and wanted to get away from active property management. With the single tenant deals, it should be looked at much like a bond or an annuity. You plunk down your money and get a monthly payment. The property is, in my opinion, depleted as time passes. How many Arbys do you know that are in a 20 year old building. The single tenant also puts the brakes on appreciation. After looking at this for 6 months, I chose to put the money into a tenant in common (TIC) that gives you fractional ownership of a class A building that is professionally managed for NNN returns with many tenants. You can now use this type of property for a 1031 exchange going from residential rentals. Hope this adds to your information to consider.
Wally