close

Sign up for our email list to get exclusive access to our new and off-market listings before they hit the market!



    Are you a..?

    No Thanks

    Bonus Depreciation for Car Wash Properties

    Understanding Bonus Depreciation

     

    Bonus depreciation allows businesses to deduct a significant portion of an asset’s cost in the first year it is placed in service. This tax incentive was expanded under the Tax Cuts and Jobs Act (TCJA) of 2017, allowing for 100% depreciation on qualified property acquired and placed in service after September 27, 2017, and before January 1, 2023. However, this percentage is set to phase out, decreasing to 80% in 2023, 60% in 2024, 40% in 2025, and 20% in 2026 before being fully phased out in 2027. Just remember, it is essential to consult your tax and accounting advisors before engaging in any transaction involving bonus depreciation to evaluate the terms and the tax implications for your specific situation.

     

    Benefits for Car Wash Properties

     

    Car wash properties, particularly those with substantial equipment investments, benefit greatly from bonus depreciation. These facilities often require significant expenditures on specialized equipment such as automated wash systems, water reclamation systems, and drying equipment, all of which qualify for accelerated depreciation. This allows car wash owners to quickly recoup their investments, improving cash flow and reducing tax liabilities.

    Growth in the Car Wash Industry

     

    Growth in the Car Wash Industry | Car Being Washed

     

    Within the world of commercial real estate, the car wash industry has been experiencing robust growth, driven by increased consumer demand for automated car wash services. Reports indicate significant investment activity, with both private and institutional investors showing heightened interest in car wash properties due to their strong cash flow potential and tax advantages. The industry is expected to continue expanding, making car wash properties an attractive investment opportunity.

    The global car wash service market size was estimated at USD 32.47 billion in 2023 and is anticipated to grow at a compound annual growth rate (CAGR) of 6.1% from 2024 to 2030

     

    US Car Wash Service Market Graph

     

    Strategic Tax Planning with Cost Segregation

     

    Cost segregation is a valuable strategy for car wash owners looking to maximize their tax savings. By reclassifying components of a property from real property to personal property, owners can accelerate depreciation deductions. This strategy is particularly effective for car wash facilities, given the high value of their specialized equipment. When combined with bonus depreciation, cost segregation can significantly enhance the financial benefits of owning a car wash. For starters, view some of Brisky’s Trademark Car Wash and WhiteWater Express Car Wash properties

    Understanding and Leveraging Bonus Depreciation 

     

    For investors and operators in the car wash industry, understanding and leveraging bonus depreciation is crucial. The accelerated depreciation of car wash equipment not only provides immediate tax benefits but also supports the industry’s growth by improving cash flow and reducing financial burdens. As the industry continues to expand, staying informed about tax incentives and strategic planning opportunities will be key to maximizing returns on car wash property investments.

     

    Sustainability in Commercial Real Estate

    Sustainability is no longer just a buzzword in the commercial real estate (CRE) industry; it’s a business imperative. Driven by environmental concerns and economic benefits, real estate developers and investors are increasingly committing to sustainable building practices. This article explores the latest trends in sustainability within the CRE sector, emphasizing how companies can align with these practices to enhance their market standing and contribute to environmental preservation.

     

    Emerging Trends in Sustainable Commercial Real Estate 

    Energy Efficiency and Green Building Standards 

    Energy efficiency remains at the forefront of sustainable real estate. Buildings designed to consume less energy reduce greenhouse gas emissions and operational costs. The LEED certification, as highlighted in multiple sources, remains a golden standard for assessing a building’s environmental performance. Properties with such certifications not only attract environmentally conscious tenants but also benefit from higher occupancy rates and increased asset value .

     Innovative Building Materials and Technologies 

     

    The adoption of cutting-edge materials and technologies plays a crucial role in the sustainability of commercial properties. Features like smart glass, which can adjust its transparency to control solar radiation, and high-performance insulation materials, significantly reduce a building’s energy demands. Such innovations not only contribute to sustainability but also offer a significant return on investment by lowering maintenance costs over time . 

    Renewable Energy Integration 

    With the cost of renewable energy sources like solar and wind decreasing, their integration into commercial real estate projects is becoming more feasible. Implementing these technologies not only helps buildings reduce their carbon footprint but also aligns with global efforts towards carbon neutrality.

    Benefits of Embracing Sustainability in CRE 

    The benefits of integrating sustainability into commercial real estate extend beyond environmental impact. Financial incentives, including tax benefits and lower utility costs, make sustainable buildings more appealing to investors and tenants. Furthermore, as regulatory frameworks around the world tighten, owning and operating sustainable properties will likely become a regulatory necessity, not just an optional upgrade .

    A Cornerstone of Growth and Innovation 

    As the commercial real estate industry evolves, sustainability is becoming a cornerstone of its growth and innovation. Companies that adopt and promote green practices stand to gain significantly, both in terms of financial benefits and brand reputation. By embracing sustainable development, the CRE sector can not only contribute to the global environmental goals but also ensure economic viability and resilience in the face of changing climates.

    Introduction to Sale-Leaseback with Brisky Net Lease

    Brisky Net Lease provides full-scale buyer and seller representation on real estate and triple-net lease properties nationwide. Brisky spans the nation with offices in Minneapolis, Los Angeles and Charlotte. Founded in 2010, Brisky Net Lease is known for excellent client service, transparent communication, and determined results for large institutions, private groups, and individual investors

    Unpacking the Benefits of Sale-Leaseback

     

    Strategic Considerations for Sale-Leaseback

     

    A sale-leaseback strategy allows business and property owners to sell their property and simultaneously lease it back from the buyer. This arrangement provides a multitude of strategic benefits:

    Immediate Access to Capital

    Businesses can gain instant capital, which can be utilized for expansion, debt reduction, or reinvestment into core operations. This influx of resources can be pivotal for growth or restructuring strategies.

    Unlocking Equity

    By converting an owned property into liquid assets, companies can unlock equity that was previously tied up, enhancing their financial flexibility.

    Improved Cash Flow

    Sale-leaseback deals can significantly improve cash flow by reducing capital tied up in real estate and redirecting it towards more profitable ventures.

    Asset-Light Strategy

    This approach allows businesses to maintain operational control over the property while not having it on the books, enabling a focus on core business activities without the burden of property management.

    Flexibility and Stability

    Sale-leaseback agreements offer flexibility in lease terms and duration, tailored to fit the strategic needs of the business. Furthermore, these arrangements provide stability and certainty for long-term planning.

    Tax and Financial Benefits

    Participating in a sale-leaseback can yield notable tax benefits and enhance financial ratios like Return on Assets (ROA) and Return on Equity (ROE). These improvements can make a significant impact on a company’s financial health and appeal to investors.

    Risk Mitigation

    In fluctuating market conditions, locking in a long-term lease can stabilize property costs and mitigate risks associated with property value fluctuations.

    Strategic Considerations for Sale-Leaseback

    While the benefits are compelling, it’s crucial for businesses to thoroughly assess the terms and potential implications of a sale-leaseback deal. Brisky Net Lease’s experience with high-profile transactions across retail sectors like restaurants, grocery and furniture demonstrate their ability to help businesses and property owners unlock capital, improve cash flow and focus on core operations while retaining the use of the property. 

    Brisky Net Lease is actively targeting sectors such as Auto & Recreation Vehicle Dealerships, Manufacturing/Industrial Properties, and Office Buildings, or those considering this financial tool it’s important to evaluate the terms and consider long term implications. If you’re interested in learning more, please reach out to the Brisky team..

    Goodwill Leverages E-Commerce with GoodwillFinds: A New Era of Thrifting

    Goodwill Leverages E-Commerce with GoodwillFinds: A New Era of Thrifting

    Goodwill, a renowned organization for its thrift stores and community programs, has ventured into the ecommerce space with GoodwillFinds, a platform that reimagines the thrift shopping experience. This initiative marks a significant leap for Goodwill, leveraging the power of digital transformation to broaden its reach and impact.

    E-Commerce Meets Social Good: The Rise of GoodwillFinds

     

    GoodwillFinds was launched as a second hand marketplace to support Goodwill’s mission of providing job training, placement, and youth mentorship programs across the U.S. This online venture showcases a curated selection of clothing, books, home decor, and more, allowing shoppers to contribute to local community programs with their purchases. The platform’s net proceeds directly benefit the regions from which items were sourced, ensuring that every purchase supports Goodwill’s extensive social service programs​.

    Matthew A. Kaness, a veteran in retail and digital commerce, has been appointed as the CEO of GoodwillFinds. With his extensive experience, Kaness is set to drive the platform’s expansion and enhance Goodwill’s impact both online and in-store​​. Under his leadership, GoodwillFinds aims to become a leading online resale site, supported by the vast network of Goodwill’s physical stores.

    A Strategic Move Towards Digital Thrifting

     

    GoodwillFinda | A Strategic Move Towards Digital ThriftingThe transition to e-commerce is not just a trend but a strategic response to the growing demand for online shopping. GoodwillFinds is designed to meet the needs of conscious consumers seeking sustainable shopping options, while also making thrifting more accessible. The platform has seen rapid growth since its inception, with plans to onboard all Goodwill members and stores​.

    The global secondhand market is booming, with projections indicating significant growth in online sales. GoodwillFinds is poised to capture a significant portion of this market, benefiting from the trend towards sustainable and conscious consumption​​.

    How GoodwillFinds Works

     

    GoodwillFinds offers an intuitive and straightforward shopping experience. Users can easily create an account, browse through various categories, and shop for new arrivals. While it focuses on direct sales, the platform maintains Goodwill’s traditional model by encouraging physical donations at its numerous storefronts​​.

    GoodwillFinds – A New Chapter in Thrifting

     

    GoodwillFinds - A New Chapter in Thrifting

     

    GoodwillFinds represents a modern approach to thrift shopping within the commercial real estate market, merging Goodwill’s mission with the convenience of online retail. This initiative not only broadens Goodwill’s reach but also strengthens its community support programs. As e-commerce continues to evolve, GoodwillFinds stands out as a purpose-driven platform that offers both sustainability and social impact.

    NNN Leases vs. Other Types of Commercial Leases

    Commercial real estate leases can be complex, with various types determining the allocation of costs like property taxes, insurance, and maintenance between landlords and tenants. Among these, NNN leases stand out for their distinct structure and financial implications.

    What is an NNN Lease?

     

    NNN, or triple net leases, require tenants to cover property taxes, building insurance, and maintenance costs in addition to rent and utilities. This setup offers landlords a predictable income stream by transferring the responsibility for major ongoing expenses to tenants. The tenant’s financial commitment extends to any increases in property taxes and insurance premiums, as well as both routine and major maintenance tasks

    Single and Double Net Lease Types: A Contrast

     

    • Single Net Leases: These are less common and involve tenants paying only the property taxes besides the rent. This model offers minimal risk transfer from landlords to tenants.
    • Double Net Leases: More prevalent in commercial real estate, tenants under double net leases bear the cost of property taxes and insurance, excluding major maintenance, which remains the landlord’s responsibility.

     

    Comparing Lease Types

     

    Commercial Lease TypesThe core difference between these leases lies in the degree of financial and operational responsibility placed on the tenant. While NNN leases offload most of the financial risk and management responsibilities to tenants, single and double net leases retain varying degrees of these aspects with the landlord. This distinction is crucial for both parties in terms of financial planning, risk management, and investment strategy.

    Benefits and Drawbacks of NNN Leases

     

    • Advantages for Landlords: NNN leases minimize landlords’ variable expenses and management responsibilities, offering a stable and predictable profit source. Tenants benefit from potentially lower base rents and greater control over the property’s operating expenses.
    • Challenges for Tenants: These include the risk of unreported property issues, possible neglect of maintenance leading to higher costs, and financial burden due to property tax increases or unexpected repairs.

     

    Making the Choice

     

    The decision between NNN and other lease types hinges on several factors, including risk tolerance, financial objectives, and the specific needs of the property in question. For tenants, the key considerations are the expected costs of taxes, insurance, and maintenance over the lease term. Landlords, meanwhile, must balance the desire for stable income against the potential for tenant defaults and property mismanagement.

    So Which Lease Type is the Right One?

     

    So Which Lease Type is the Right One?

     

    Understanding the nuances of NNN leases versus single and double net lease types is vital for anyone involved in commercial real estate. By carefully considering the responsibilities, benefits, and potential drawbacks of each lease type, investors and tenants can make informed decisions that align with their strategic goals and operational capabilities.

    Ross Stores: Navigating Expansion and Financial Growth

    Ross Stores, Inc. (ROST) continues to demonstrate a robust expansion strategy, marking its presence strongly in the off-price retail sector. With a series of store openings across various states, the company is not only increasing its footprint but also reinforcing its commitment to offering high-quality, in-season merchandise at significant discounts. This strategy is aimed at catering to the evolving needs of a diverse customer base while maintaining a competitive edge in the market.

    Strategic Expansion Enhances Market Presence

    In a bold move, Ross Dress for Less has inaugurated stores in New York and Minnesota, tapping into new customer bases. Similarly, dd’s DISCOUNTS has expanded its presence in California, Maryland, Tennessee, and Texas. This is part of Ross Stores’ vision to eventually operate at least 2,900 Ross Dress for Less and 700 dd’s DISCOUNTS locations. Ross Dress for Less, the largest off-price apparel and home fashion chain in the United States with 1,775 locations in 43 states, the District of Columbia, and Guam. The Company also operates 352 dd’s DISCOUNTS in 22 states  showcasing an extensive network that serves a broad spectrum of customers with affordable fashion and home products​​.

    The retailer’s aggressive growth strategy involved adding approximately 100 new stores during fiscal 2023, with a mix of Ross Dress for Less and dd’s DISCOUNTS stores. This expansion not only reinforces the brand’s presence but also enables Ross Stores to capture diverse consumer markets and fuel further growth, solidifying its dominant position in the off-price retail segment​​.

    Financial Strength and Future Outlook

    Looking ahead, Ross Stores is poised for growth in 2024, supported by higher merchandise margins, lower distribution expenses, and easing supply-chain headwinds. The company’s strategic focus on expanding its store network, both in existing and new markets, continues to play a critical role in its success. With an improved operating margin forecasted for the fourth quarter of fiscal 2023, Ross Stores is well-positioned to capitalize on its competitive bargains and off-price retail model, ensuring it remains an attractive destination for value-conscious shoppers​​.

    Embracing a Value-Driven Future

    Driven by its initiatives, the stock of the off-price clothing retailer has seen a 24.7% rise over the last six months, outperforming the industry’s growth of 12.9%. Analysts are notably positive about the company’s prospects. Currently, the Zacks Consensus Estimate for the retailer’s fiscal 2023 sales and earnings per share (EPS) stands at $20.1 billion and $5.36, respectively, reflecting year-over-year increases of 7.5% and 22.4%. For fiscal 2024, the sales and EPS consensus estimates are set at $21 billion and $5.83, respectively, suggesting year-over-year growth of 4.3% and 8.8%.

     

    Embracing a Value-Driven Future | Ross Stores Fiscal Growth Chart for 2023

     

    Ross Stores’ commitment to strategic expansion, combined with its strong financial performance, underscores its potential for sustained growth. By offering significant discounts on high-quality, name-brand products, Ross has successfully catered to budget-conscious consumers, a strategy that is likely to continue driving its success. As Ross Stores gears up for 2024, its robust expansion plans and operational efficiencies position it as a key player in the retail sector, promising a future of continued growth and success.

    For those seeking investment opportunities in the retail space, Ross Stores presents a compelling case of resilience and strategic growth, making it a noteworthy consideration for potential investors.

     

    Tenant Retention Strategies for Commercial Property Owners

    In the competitive landscape of commercial real estate, retaining tenants is paramount for ensuring a steady income stream and enhancing property value. The challenge for property owners and managers lies in adapting to the evolving needs of businesses and creating an environment that encourages long-term occupancy. Drawing on insights from industry studies, this article outlines effective strategies for commercial property owners to boost tenant retention.

    Understanding Tenant Needs

     

    A comprehensive study shared by FieldCircle underscores the shift in tenant expectations, revealing that a significant majority—65% of respondents—are satisfied with the facilities management provided by their office spaces. However, the desire for a complete experience, encompassing well-maintained facilities and responsive management, is becoming increasingly evident. Property owners can leverage this insight by conducting regular tenant satisfaction surveys and adapting their services to meet these evolving needs, thereby enhancing tenant retention.

    Flexible Lease Terms

     

    In today’s uncertain economy, flexibility in lease terms has emerged as a critical factor for businesses considering their real estate options. Property Manager Insider highlights that offering more adaptable lease renewal terms can make the decision to stay an easy one for tenants. For instance, introducing options for shorter lease durations or scalable space can accommodate the changing needs of businesses, thereby fostering loyalty and encouraging lease renewals.

    Leveraging Technology

     

    Leveraging Technology to Retain Tenants

     

    The integration of technology within commercial properties is a significant draw for modern tenants. Upgrades such as high-speed internet and smart energy systems not only improve the efficiency and convenience of a space but also support tenants’ sustainability goals. A report by Property Manager Insider points out that technological innovations can serve as a competitive advantage, making tenants more inclined to renew their leases due to the unique benefits these features offer.

    Effective Communication and Incentives

     

    Wise Property Management emphasizes the importance of open communication and responsiveness to tenant needs. Streamlining processes through online systems for payments and maintenance requests, coupled with offering incentives for lease renewals, can significantly enhance tenant satisfaction. For example, providing discounts or free services as renewal incentives can be an effective strategy to increase retention rates.

    Prioritizing Sustainability and Safety

     

    Sustainable practices and building safety are increasingly important to commercial tenants. Implementing eco-friendly measures and ensuring health and safety compliance not only demonstrates a commitment to tenant well-being but also aligns with their operational priorities and values. According to FieldCircle, properties that adopt sustainable practices and prioritize safety are more likely to retain tenants, as these factors play a crucial role in their decision-making process.

    Building a Community

     

    Creating a sense of community among tenants can enhance the attractiveness of your property as a vibrant business hub. Organizing networking events and encouraging collaboration can foster a supportive environment, making tenants more likely to remain long-term. Property Manager Insider suggests that a strong community feel can lead to higher tenant satisfaction and retention rates.

    A Strategic Approach to Tenant Retention

     

    For commercial property owners, a strategic approach to tenant retention is essential for success in the commercial real estate market. By focusing on flexibility, technology, communication, sustainability, and community building, owners can create a compelling environment that meets the needs of modern businesses. Implementing these strategies, backed by specific industry statistics and insights, can not only improve tenant retention rates but also position your property as a desirable location for businesses seeking growth and stability.
    Incorporating these strategies, informed by real-world data and insights, can significantly enhance tenant retention rates, ensuring the long-term success and profitability of commercial real estate investments.

    Brisky Net Lease Continues Growth, Expands to California

    Brisky Solidifies West Coast Presence with LA Expansion

    MINNEAPOLIS, Minn. (February 19, 2024) – Today, commercial real estate firm Brisky Net Lease (Brisky) announced plans to expand by adding a regional office in Los Angeles, California. The firm specializes in triple net lease (NNN) transactions and other forms of investment real estate across the United States.

    Brisky identified Los Angeles as a critical market early in the firm’s targeted growth plan. The Los Angeles team is led by Brisky’s VP of Strategy, Michael Palffy, who spearheads strategic initiatives for Brisky Net Lease’s expansion and recruiting efforts. Palffy is joined by four talented brokers who will be introduced in the days to follow.

    “As Brisky Net Lease continues its thoughtful expansion, Los Angeles made obvious sense. The net lease broker talent pool, coupled with a massive investor network will undoubtedly add value to our clients and propel additional growth, said Brian Brisky, Founder and President. Additional markets are planned, but this will be a major hub for Brisky’s full-service investment sales platform.”

    Founded in 2010 by Brian Brisky, Brisky is known for excellent client service, transparent communication, and determined results for large institutions, private groups, and individual investors. With more than 90 percent of their transactions coming from repeat clients, Brisky achieved steady results in 2023 during a changing market and looks forward to continued growth in 2024.

    About Brisky Net Lease

    Brisky Net Lease is a commercial real estate brokerage that provides full-scale buyer and seller representation on real estate and triple-net lease properties nationwide. Brisky Net Lease is based in Minneapolis with another regional office in Charlotte. For more information, please contact us at info@brisky.com or 612-413-4200.

    Modernization of QSR: Transforming the Triple Net Industry

    Quick Service Restaurants (QSRs) are at the forefront of change in the Triple Net industry, reshaping the landscape and setting new trends in commercial real estate. In this article, we’ll delve into how QSRs are revolutionizing the Triple Net Lease sector and explore the changes that are still on the horizon.

    The Evolution of QSR

     
    Quick Service Restaurants (QSRs), commonly known as fast-food chains, have undergone a significant transformation in recent years. They have moved beyond traditional norms, adopting innovative strategies to meet the evolving demands of consumers. The traditional QSR meaning is expanding to include enhanced customer experiences, advanced technology integration, and sustainable practices. These adaptations are not only changing the way we dine but also impacting the commercial real estate (CRE) and triple net lease (NNN) landscape. Here’s a closer look at some of the key QSR industry trends that are having a profound impact on the Triple Net Lease landscape.

    Sustainability and Eco-Friendly Initiatives

     
    In the evolving landscape of Quick Service Restaurants (QSRs), sustainability and eco-friendly initiatives have become pivotal components. Modern QSRs are reshaping their practices to align with environmental consciousness. This includes sourcing local and organic ingredients, adopting eco-friendly packaging, implementing energy-efficient technologies, and reducing waste through recycling programs. By incorporating renewable energy sources and educating customers about their sustainability efforts, QSRs are not only appealing to eco-conscious consumers but also enhancing operational efficiency.

    For Triple Net landlords, having QSR tenants actively engaged in these initiatives translates to a positive public image, potential cost savings, and increased attractiveness of the property. As sustainability becomes ingrained in the QSR industry, the triple net landscape stands to gain from the positive impact of these environmentally friendly practices.

    Adapting to the On-the-Go Lifestyle

     

    Modernization of QSR | Automation and Technology Integration

     

    The modernization of QSRs is also catering to the on-the-go lifestyle of consumers. With the rise of delivery services and drive-thru options, QSRs are enhancing their accessibility and convenience. Mobile ordering, curbside pickup, and efficient drive-thru experiences are becoming integral parts of the QSR landscape, ensuring that customers can enjoy their favorite meals with minimal effort.

    For Triple Net landlords, these adaptations can result in increased foot traffic and sales for their QSR tenants. The ability to provide diverse and convenient service options can make a QSR a more attractive tenant, enhancing the overall value of the leased property.

    Health-Conscious Trends

     

    Health-conscious trends are reshaping the landscape of Quick Service Restaurants (QSRs) as consumers increasingly prioritize wellness in their dining choices. Modern QSRs are adapting by offering healthier menu options, incorporating nutritional information into their offerings, and sourcing high-quality, nutritious ingredients. From salads and lean protein alternatives to plant-based and gluten-free options, QSRs are providing a broader range of choices that cater to diverse dietary preferences. Some establishments are even leveraging technology to offer customized and personalized menu selections, meeting the individual health needs of their customers.

    For Triple Net landlords, embracing health-conscious trends in QSRs can lead to increased foot traffic and sales, as these establishments attract health-conscious consumers seeking convenient yet nutritious dining options. The alignment with wellness trends also enhances the overall image of the property, potentially attracting a broader customer base and contributing to the long-term success of the tenant-landlord relationship.

    Commercial Properties: A Smart Investment Opportunity

    Investing in commercial properties presents an excellent opportunity for generating passive income and establishing long-term wealth. To optimize your returns, it’s crucial to select the right investment opportunity. One effective strategy is to explore commercial properties featuring NNN leases.

    What is an NNN Lease?

    NNN leases, also known as triple net leases, are a type of lease agreement in which the tenant is responsible for paying all property taxes, property insurance, and maintenance costs, in addition to a predetermined monthly base rent. This makes NNN leases a very attractive investment option for commercial real estate investors, as they offer a predictable and steady income stream with minimal risk and responsibility.

    Benefits of Investing in Commercial Properties with NNN Leases

    There are several reasons why commercial properties with NNN leases are a smart investment:

    • Stable Income Stream: NNN leases typically place the responsibility for property expenses on the tenant, including taxes, insurance, and maintenance. This results in a predictable and consistent income stream for the property owner. 
    • Risk Mitigation: NNN leases are usually appealing to national and well-established tenants with strong credit. This minimizes the risk of tenant default and ensures reliable rental payments. NNN leases can also help protect property owners from unexpected financial burdens, such as rising property taxes or repair costs. Additionally, NNN leases often come with longer lease terms, providing greater stability and reducing turnover. This stability is advantageous for investors looking for a reliable income source over an extended period.
    • Tax Benefits: NNN lease investments offer the potential for tax deferral through the use of 1031 and 1033 Tax-Deferred Exchange Codes.
      • Defer capital gains taxes: Investors can defer capital gains taxes on the sale of an investment property until they sell the replacement property. This can give investors more time to invest the capital gains and grow their wealth.
      • Maintain investment momentum: Investors can use 1031 and 1033 exchanges to maintain their investment momentum and avoid selling one property before buying another.
      • Diversify their portfolio: Investors can use 1031 and 1033 exchanges to diversify their portfolio by exchanging one type of property for another, or by exchanging a property in one location for a property in another location.
    • Inflation Protection: Rental income in NNN leases is typically tied to periodic rent increases, often based on the Consumer Price Index (CPI) or other inflation metrics. This can help investors maintain the purchasing power of their rental income over time.

     

    As with any investment, it’s essential to thoroughly research potential properties, assess the terms of the NNN lease, and consider your investment objectives and risk tolerance before committing to this type of real estate investment.

    Types of Commercial Properties That Typically Have NNN Leases

    Triple Net Leases are commonly associated with a variety of commercial properties, particularly those that involve long-term, stable income streams. Some of the types of commercial properties that typically have NNN leases include:

    • Retail Properties: Both single-tenant and multi-tenant properties with a variety of retail tenants, such as grocery stores, department stores, shopping malls, and strip malls.
    • Office Buildings: Both Class A and Class B office buildings, as well as medical office buildings and other specialized office buildings.
    • Industrial Properties: Warehouses, manufacturing facilities, distribution centers, and other industrial buildings.
    • Quick-Service Restaurants (QSRs) and Casual Dining Restaurants: Popular restaurant chains, such as McDonald’s, Starbucks, and Chipotle.
    • Pharmacies: Both national pharmacy chains, such as CVS and Walgreens, as well as independent pharmacies.
    • Banks: Both national banks, such as Chase and Bank of America, as well as regional and community banks.
    • Gas Stations and Convenience Stores: Both national chains, such as ExxonMobil and 7-Eleven, as well as independent gas stations and convenience stores.
    • Other Commercial Properties: Other types of commercial properties that may have NNN leases include hotels, fitness centers, and self-storage facilities. NNN leases are also often used for properties that are leased to government entities, such as post offices and courthouses.

     

    NNN leases can be an attractive option for both landlords and tenants. For landlords, NNN leases provide a predictable and consistent income stream, while minimizing the risk of financial burdens from unexpected property expenses. For tenants, NNN leases can offer lower rental rates and the flexibility to control their own property expenses.

    Factors to Keep in Mind When Looking for Commercial Properties 

     

    Factors to Keep in Mind When Looking for Commercial Properties 

     

    When searching for commercial properties there are a few key factors to keep in mind:

    • Tenant Selection: It is important to choose tenants with a strong financial standing and a good credit rating. This will help to ensure that you receive your rent payments on time and in full.
    • Lease Term: Longer lease terms are more valuable, as they reduce the risk of tenant non-renewal.
    • Rent Bumps: Choose properties with periodic rent adjustments to ensure that your income stream keeps up with inflation.
    • Location: Select properties in areas with strong demographics, high growth potential and good underlying real estate. This will help to increase the value of your property over time and make it more desirable to a new tenant if the current tenant were to leave.
    • Guarantee: Oftentimes NNN leases include a guarantee from the tenant, but they can vary from personal to corporate so understanding the strength of the guarantee is important.

     

    Financing NNN Lease Commercial Properties

    There are a variety of financing options available for investors who are interested in purchasing commercial properties Some of the most common options include:

    • Traditional Commercial Mortgages: These mortgages are typically offered by banks and other financial institutions.
    • Hard Money Loans: Hard money loans are private loans that are typically offered at a higher interest rate than traditional commercial mortgages. However, they can be a good option for investors who need to close quickly or who have difficulty qualifying for a traditional mortgage.
    • Private Equity: Private equity firms can provide financing for large commercial real estate investments.
    • 1031 Exchange: Proceeds from another property can be used for the purchase of a new investment property using a 1031 exchange, which can defer capital gains taxes.

     

    Additional Tips for Investing in Commercial Property for Sale with NNN Leases

    • Work with a qualified commercial real estate broker who can help you find suitable properties and negotiate the best possible terms.
    • Get the property inspected by a qualified professional before you purchase it to identify any potential problems.
    • Purchase adequate insurance coverage to protect your investment.