Industrial NNN Leases
- 10-20 year leases
- Some of these tenants have been there for 30-70 years!
- Customized the building to their needs
- Typically no property management needed – 2 year inspections (as needed)
- Imagine your NNN as a bond.
- What is the ability of the tenant to pay their bills?
- Is cooperate backing the lease?
- The strength of your lease is the reliability of the cashflows
Get quarterly reports and verify the “rosiness” of the picture. Always audit the financials and be aggressive with it! Renewal Risk
- Sale leaseback – Buy from the owner-operator and then lease it back for 20 years
- Short timeframes left on the lease are more of the “value add” purchase
Debt on NNN
- CMBS Nonrecourse debt
- Recourse debt
- Regional Banks
- More flexible
- Better terms
Schools, traffic count, etc. doesn’t matter! And the dirtier the better! Find an investment group that does your new asset class already. Most people are willing to help each other!
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