The Net Lease Market
July 20, 2021Like much of the commercial real estate world, the net lease market is constantly changing. This dynamic industry is always growing in popularity among investors. The net lease scope has grown from a niche market to an integral part of the commercial real estate machine. We understand the net lease market and know it is an integral part of understanding the in’s and outs of commercial real estate. Avison Young’s Net Lease experts watch the market to view trends to help investors stay up-to-date on potential investment options. We make this research readily available to the public and pride ourselves on the accuracy of the information we provide.
Why Invest in the Net Lease Market?
Top 10 Reasons to Invest in the Net Lease Market
Passive Income – “Mailbox Money”
The investor does not need to be actively involved in the management of the property and collects rent check each month.
Increased Property Value
As the landlord, and depending on the lease, you can negotiate higher rental terms thus increasing the value of your property.
High-Quality/Credit Worthy Tenants
Most net lease market transactions are the buying and selling of national brand tenants and these tenats usually come with good credit. This means you can count on them to make the rent payment each month. Net leases are often backed by corporate guarantees.
Attractive Financing
lenders prefer net lease transactions as they also know it creates stable income.
Low Turnover Rate
This low rate helps you, the investor, get better financing, and alows you to not focus your efforts on leasing and the expenses of marketing your property.
Attractive Price Points
Net leased assets tend to range from under $1M to anywhere under $10M. Depending on the location, length of lease, tenant, and other factors you can determine what is the best price for you.
Higher Liquidity
Net lease market advantages are know across the industry. This helps you sell quickly if you need an exit strategy
Opportunity to conduct a Sale-Leaseback Transaction
These deals happen when a company owns a building that they currently occupy, but need to sell it to raise funds for some part of their business. After the sale, they will lease back the space.
NO management responsibilities
NNN leases mean no costs or responsibilities fall on the landlord.
Most importantly…STABILITY
These are stable assets with long-term leases. This guarantees money for you and with low turnover, you are able to plan for the long-term.