Dollar General: (6.25% - 6.75% Cap)     Family Dollar: (7.25%-8.00% Cap)     Dollar Tree: (7.25% - 7.75%)     Fred's Super Dollar: (8.00% - 8.50% Cap)

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   NET LEASE INVESTMENTS

Dollar Store Properties

Over the past 5 years Dollar Store Properties have become some of the most attractive Net lease Investments available for buyers and investors. Due to their attractively priced products, the sales revenues have soured for the four main Dollar Stores: Dollar General, Family Dollar, Dollar Tree, and Fred's Super Dollar. Because of the strong corporate guarantees that are offered and the bright outlook on the future of this sector, sales of these stores has increased with our team completing over 300 since 2007.

 

In the real estate world, "Net Lease" is a term used to describe the lease structure of an occupied property. Net Lease Investments are Investments in real estate where the tenant pays all or a portion of the three main real estate related expenses, Taxes, Insurance, and Maintenance. Over the past two decades Net Lease Investments have become the most popular type of desired real estate. Netleasinvestments.com was created in order to provide information on Net Lease Investments, and some of the most common tenants.

 

As the equity markets have remained unpredictable many investors have sought safer investments vehicles, with more long term protection. This flight to safety has coincided with the growth of the Net Lease Market. Net Lease Investments offer investors the opportunity to own real estate anywhere in the country, which has been leased to national or regional tenant on a long term basis with minimal to zero landlord responsibilities.

 

Net Leased space can refer to occupied real estate within a shopping center or in a single tenant property. Although the lease definitions apply to both scenarios, Netleaseinvestments.com is focused on the Net Lease Single Tenant Investment Market, i.e. properties with only one tenant operating on a Net Lease. There are multiple types of Net Lease structures, with the differencing factor being the responsibilities of the landlord. It is important to note that not only are these definitions sometimes subjective to different meanings, but also that each tenant has their own understanding as well. Below are the different types:

 

ABSOLUTE NNN LEASE:

 

An Absolute NNN (Triple Net) Lease, sometimes referred to as a NNN Lease, carries with it zero landlord responsibilities. The tenant is not only responsible for the three N’s which stand for Taxes, Insurance, and CAM (Common Area Maintenance), but also any and all capital repair and replacement to the roof and structure. Because of this lack of landlord responsibility this lease type is the most attractive, and thus the most commonly sought after.

 

DOUBLE NET LEASE:

 

A Double Net (NN) Lease, sometimes referred to as NN1/2 lease, carries with it minimal landlord responsibilities. While the tenant pays directly or reimburses for Taxes, Insurance, and CAM, the landlord is responsible for any and all capital repair and replacement to the roof and structure.

 

GROUND LEASE:

 

A Ground Lease is Absolute NNN in nature and type, but differs in terms of what a landlord owns. As the name suggests, an owner of a Ground Lease owns the land, which is leased to a tenant. The tenant actually owns and typically builds their own building on this leased land. The tenant is again responsible for Taxes, Insurance, and CAM of the land and inherently retains all responsibility for their building.

 

****Variations do exist of these Net Lease types, and subsequently have similar names. If you are reviewing a property investment, please pay close attention to what the tenant and landlord are responsible for.

 

Net lease investments attract a wide array of investors, from high net worth individuals and partnerships to large institutional investors and Real Estate Investment Trusts (REITs). Many view single-tenant net lease investments as equivalent to and often compare them to bonds, due to their long term nature and corporately guaranteed returns.

 

As with any investment there are risks associated with Net Lease Investments, albeit minimal. The largest risk is the re-leaseability of a property if the tenant decides not to renew the lease through an option term or if the tenant for whatever reason ceases to exist. When choosing an investment it is of the utmost importance to research not only the area surrounding the property but also the company that will inhabit the property. If you have any questions or would like more information on Net Lease Investments please contact us.

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