Recent Closings - Triple Net 1031 Exchange Deals

We are pleased to announce the following recent closings: NNN Florida Walgreens: $8,662,371 - Sourced off-market deal through developer and broker network. Record setting cap rate of 4.85%. All cash transaction with 1031 exchange buyer.

Triple Net CVS: $6,450,000 - Low leverage 1031 exchange buyer. 24 years left on absolute net lease - 5.32% cap rate. Solid midwest location.

Net Leased Dollar General: ~ $1MM - high cap rate deal 8%+ with 7+ years on NN lease. Growing SE US location.

For more details or help on your NNN 1031 exchange, give us a ring at 1-866-539-1777.

How to Find the best Walgreens 1031 NNN Real Estate For Sale

Finding a good selection of Walgreens 1031 NNN Real Estate for sale is not as easy as you might hope. Because there is no reliable central repository of commercial listings, the Walgreens 1031 NNN Real Estate for sale in the market are typically spread across a number of different resources, only some of which are freely available to the public.

Internet Listings of Walgreens 1031 NNN Real Estate for Sale

There are a few sites which present Walgreens 1031 NNN Real Estate for sale as well as other commercial real estate listings. The two best known, Loopnet and Costar Exchange, are in the process of merging. Both allow just about anyone to post listings of Walgreens 1031 NNN Real Estate for sale, as well as other property types. While Costar lets anyone search its database, Loopnet only gives full access to paying subscribers. The key problem with these sites is that many of the best Walgreens 1031 NNN Real Estate for sale never make it on to them.

Principal Listings of Walgreens 1031 NNN Real Estate for Sale

Many principals, whether they are owners or developers, list their own Walgreens 1031 NNN Real Estate for sale on their websites. CrestNetLease and Kimco Realty are two such ownership groups that do this, and Bencor Development is an example of a developer that posts its Walgreens 1031 NNN Real Estate for sale right online. Although direct principal to principal marketing can yield you access to inventory, it is a great real of work to visit each of these sites. In addition, because you do not have an expert guiding you, you may not know which of the Walgreens 1031 NNN Real Estate for sale that you see are good deals and which are not.

Hire A Professional Broker to Bring You Walgreens 1031 NNN Real Estate for Sale

The easiest way to find Walgreens 1031 NNN Real Estate for sale is also the best way. Instead of spending your time to scour the Internet to find just a small subset of the Walgreens 1031 NNN Real Estate for sale out there, hire a broker and let him do the work for you. Your broker should have not only a strong knowledge of all of the places to look for Walgreens 1031 NNN Real Estate for sale, but should also have insider access to listings that you may not be able to see. In addition, he should be able to guide you to not only good Walgreens 1031 NNN Real Estate for sale, but to the best Walgreens 1031 NNN Real Estate for sale for you and your specific needs. In addition, because most sellers will pay your broker’s commission, the service and guidance that he brings you should not even cost you anything.

{ Article: How to Choose the Best Triple Net Broker }

Buy a Walgreens Property

Or call Thomas Morgan, CCIM, a Walgreens NNN Broker, at 1-866-539-1777

JUST CLOSED: $5M Walgreens NNN 1031 Investment

We are pleased to announce the closing of a NNN Walgreens in Texas. The property was sold for $5,075,000 and had approximately 15 years left on a triple net lease. The cap rate at time of sale was 6.10%.

Thomas Morgan, CCIM represented the buyer who was a Trust from the NE U.S. and was in a 1031 Exchange. They buyer had sold management intensive multi family property and was moving to the net lease segment to minimize management responsibilities.

Under a tight 1031 timeframe Morgan evaluated several Walgreens nationally and submitted offers on multiple properties to assure successful completion of the 1031.

Isola Capital placed low leverage favorable long term financing for the buyer. Isola and Morgan have collaborated on many other NNN sales including Dollar Generals, 7-Eleven and O Reilly Auto.

The Seller was represented by SVN Kase Group.

For more information on this transaction or other 1031 NNN Investments, please contact Thomas at 1-866-539-1777.

NNN Drug Store Cap Rates and NNN Market Report

NET LEASE DRUG STORE REPORT RELEASED The Boulder Group has released The Net Lease Drug Store Report. The report provides comprehensive numbers and analysis of the net lease drug store property market.

Highlights of the report include:

• Cap rates for Walgreens, CVS and Rite Aid are at historic lows
• The supply of CVS properties on the market increased by 64%
• Drug store properties are commanding a 75 basis point premium over the retail net lease market

The full report can be found here: Net Lease NNN Drugstore Report

Not All Walgreens NNN Investments Are Created Equal

On the surface, a Walgreens investment may look like all the other Walgreens. Au contraire mon frere!

Yes, the tenant credit is the same and the square footage is similar. However, there are many variables when comparing different Walgreens investments.

Everyday, we help our Walgreens 1031 clients evaluate and compare different NNN investment properties. Our clients are able to compare apples to apples due to our analysis and insights about which Walgreens NNN property most fits their criteria and investment goals.

Here is a quick list we did to help a Walgreens 1031 client do a side by side comparison of three Walgreens we made offers on. Note the additional data points in the list besides price, cap rate, rent amount etc.

Is the store open 24 hours? Does it have a drive thru? What about beer and liquor? How big is the lot? What are the reported store sales? What does the landlord have to take care of? (not all Walgreens are triple net!) How fast is the population growing? Is the area poor, wealthy or middle class?

Which deal would you choose? Yes, cap rate plays a part in relation to lease term and price but what is the better investment considering the other factors?

We help our clients answer these questions.

On many deals we take it several steps further and drill down the data even more. Other data points we help clients consider when buying a Walgreens 1031 NNN property:

• What are market rents compared to the contract rent? What can the building be leased for now and in the future?
• What is the quality of construction? Brick? Block? Upgraded features?
• What is the competitive environment? Where is the closest CVS or Rite Aid? What about another Walgreens?
• What is the age demographic? Is the area full of young people who are healthy? Or does the area have an aging population that needs prescriptions filled?
• What is the consumer spending potential? Is there underserved demand in the marketplace? Is it over supplied?

We answer all this and more, for you.

Not all Walgreens investments are created equal and neither are the people who sell them.

Make sure you have a Walgreens NNN investment advisor on your side.

Call us at 1-866-539-1777 or email us here for a free Walgreens 1031 or NNN property consultation.

JUST CLOSED: $3.2M NNN 1031 Sleepy's Investment

We are proud to announce another investment property closing! Thomas Morgan, CCIM represented an all cash 1031 exchange buyer in the purchase of a net leased property in Winston-Salem, NC.

The $3,265,000 all cash sale closed in 29 days. The property is leased to Sleepy's on a net leased basis for 12 years. The 1031 investor exchanged from a management intensive industrial/retail property to this hands-off, long term, low risk NNN investment.

The property was a 2014 build to suit for Sleepys and has phenomenal location characteristics with high traffic counts and visibility in the dominant retail corridor.

Sleepy’s LLC is a privately owned four-generation mattress retail company founded in 1931 in Brooklyn, New York, the company currently has over 2,900 employees. Sleepy’s is the second largest specialty mattress retailer and the largest bedding retailer in the US.

The seller was represented by Pegasus Investments out of Beverly Hills, CA.

Please contact Thomas Morgan, CCIM for cap rate details or for information and availability of other triple net 1031 investments. 1-866-539-1777

Other recent closings include a remodel to suit 15 year net leased Arby's, several NNN Dollar Generals and a long term NNN 7-Eleven ground lease.

Get 1031 Exchange Property Information

Property Highlights − Corporate lease with Sleepy’s, LLC − Additional guaranty from HMK Mattress Holdings, LLC (parent co.) − Brand new trophy quality construction − High impact site plan (building built right up to the lot line fronting Hanes Mall Blvd.) − 12 year lease term with minimal landlord responsibilities

Location Highlights − A+ location within the heart of Winston-Salem’s Hanes Mall retail core − Irreplaceable Sam’s Club outparcel property − Phenomenal site lines and visibility − Excellent access from both Hanes Mall Blvd. & Stratford Road − Nearly 500,000 population and $64k average household income within primary trade area − Surrounded by super regional anchors including Costco, Sam’s Club & Target − New $20 million “The Lofts” development under construction down the road brining new population − Shared drive aisle access with Sam’s Club, Chick-Fil-A, Verizon, Jared Jewelers, PetSmart & Gander Mtn.

Tenant Highlights − Sleepy’s, LLC is the largest bedding retailer and the second largest mattress retailer in the United States − Tenant current employs~2,900professionals − Tenant has over 900 retail locations in sixteen states from Maine to North Carolina, primarily in the Northeastern, Mid-Atlantic and the Midwest − 10 distribution centers located throughout the country delivering over 3,000 mattresses daily − In 2009, Sleepy’s was named the fastest-growing furniture retailer in the US

1031 replacement property- try a NNN net leased property

Need a 1031 replacement property for your 1031 Exchange? Forever leave the day to day management of your office building, apartment building or other gross-leased property behind.

Invest in a "hands-free" net leased property and spend your time doing what you want rather than dealing with tenant's needs.  Triple net leased properties (NNN) provide long term cashflow without the headaches of management.  Let the property work for you rather than you working for the property and enjoy the benefits of "mail box money".

Contact TMO to find out more about the benefits of Triple Net Leased Real Estate Investments. 1.866.539.1777

Here are just a few of the reasons why you should buy a NNN property for your 1031 exchange:

• armchair investment- ease of management with tenant maintaining and operating the property
• mail box money-  your monthly rent is yours, net to you, no expenses to pay
• long term cash flow-  leases usually range from 10 to 25 years
• high credit tenant- financially strong tenants usually publicly traded
• good appreciation-  regular rent increases provide for increase in future value
• non-recourse financing- lenders will loan on credit of tenant and strength of lease, waiving a personal guarantee by you as buyer
• easier to sell- when time comes to sell, demand is almost always strong for a NNN leased property, even in down markets
• higher residual value- net leased real estate is usually built-to-suit for retailers who have researched the market and location to find the best site to do business

Contact TMO to find out more about the benefits of Triple Net Leased Real Estate Investments for your 1031 exchange.

What is Triple Net NNN? Here is triple net lease definition

CVS NNN For Sale - Available NNN deals

CVS NNN deals continue to be in hot demand. Long term net leases of 20 or more years with a solid credit rated and no landlord responsibilities. CVS NNN make great 1031 Exchange replacement properties.

Here is a quick list of CVS NNN properties for sale that have been of interest to our NNN clients and may be of interest to as well.

CVS NNN Properties For Sale

Call 1-970-618-4086 for more info on these CVS NNN Properties For Sale.

5 Tips for Your Next Ground Lease Investment

Ground lease investment properties are some of the most unique types of NNN opportunities. While a regular "fee simple" triple net investment consists of both a building and the land on which it sits, a ground lease investment (which is also, technically fee simple) consists of just the ground. Instead of getting rent for the building, you get rent for the use of your ground.

Here are some tips for how to buy and profit from a ground lease investment:

1. Look for good tenants. Frequently, a ground lease investment will have a very strong tenant. McDonalds locations are frequently available as ground leases and many bank branches can also be purchased as ground leases.
2. Plan on appreciation. One of the drawbacks to buying a ground lease investment property is that you usually won't be able to depreciate it. The IRS doesn't let you depreciate land since it doesn't lose value over time through deterioration like a building would. The upshot of this is that you're not buying the part of real estate that loses value -- you're getting the good part. While the building on your land might be obsolete in 20 years, the land itself shouldn't be.
3. Pay a little bit more. A ground lease investment will usually a carry a lower cap rate than other triple net properties. First, you're usually buying a property with a good tenant, which in and of itself carries a lower cap rate. Second, income from land is usually valued at a higher multiple than income that comes from a mixture of land and building.
4. Leverage capital that's been 1031 exchanged a few times. When you've done a few 1031 exchanges, you end up with so much old basis that it gets part to effectively depreciate a new investment. Since you generally can't depreciate a ground lease investment anyways, using your oldest capital to buy it helps to free up money with more basis attached to it for acquiring depreciable assets.
5. If it looks too good to be true, it is. Sometimes, you'll see a ground lease asset that seems like a screaming deal -- instead of being a 6.5 cap in an 8 cap marketing, it'll be a 10 cap. If you find one of these, proceed with caution. Sometimes, a broker will list a leasehold interest as a ground lease. When you buy a leasehold interest, you aren't buying dirt, though. You're buying the building and its right to use the land -- which eventually expires. While a leasehold interest can be a good choice, it's very different from a true ground lease investment and is less expensive for a reason.

Ground Leases For Sale

Contact Thomas for more information about ground lease investments via email or toll free at 1-866-539-1777 or see ground leases for sale.

How To Find The Best NNN Properties For Sale

Finding a good selection of NNN properties for sale is not as easy as you might hope. Because there is no reliable central repository of commercial listings, the NNN properties for sale in the market are typically spread across a number of different resources, only some of which are freely available to the public.

Internet Listings of NNN Properties for Sale

There are a few sites which present NNN properties for sale as well as other commercial real estate listings. The two best known, Loopnet and Costar Exchange, are in the process of merging. Both allow just about anyone to post listings of NNN properties for sale, as well as other property types. While Costar lets anyone search its database, Loopnet only gives full access to paying subscribers. The key problem with these sites is that many of the best NNN properties for sale never make it on to them.

Principal Listings of NNN Properties for Sale

Many principals, whether they are owners or developers, list their own NNN properties for sale on their websites. CrestNetLease and Kimco Realty are two such ownership groups that do this, and Bencor Development is an example of a developer that posts its NNN properties for sale right online. Although direct principal to principal marketing can yield you access to inventory, it is a great real of work to visit each of these sites. In addition, because you do not have an expert guiding you, you may not know which of the NNN properties for sale that you see are good deals and which are not.

Hire A Professional Broker to Bring You NNN Properties for Sale

The easiest way to find NNN properties for sale is also the best way. Instead of spending your time to scour the Internet to find just a small subset of the NNN properties for sale out there, hire a broker and let him do the work for you. Your broker should have not only a strong knowledge of all of the places to look for NNN properties for sale, but should also have insider access to listings that you may not be able to see. In addition, he should be able to guide you to not only good NNN properties for sale, but to the best NNN properties for sale for you and your specific needs. In addition, because most sellers will pay your broker’s commission, the service and guidance that he brings you should not even cost you anything.

{ Article: How to Choose the Best Triple Net Broker }

Buy a NNN Property

Or call Thomas Morgan, CCIM, a Triple Net NNN Broker, at 1-866-539-1777

The Pros and Cons of Triple Net Properties

In some ways, triple net properties are as much fixed-income investments as they are real estate vehicles. Offering little to no management responsibility and long-term fixed incomes with the potential for gradual increases, they act like bonds. However, underlying their financial structures, they are still real estate and carry the same eventual risks and challenges. Here are some of the pros and cons of triple net lease properties.:

Pro: Stable Income Con: Limited Upside Triple net leases are usually structured with a flat rent or with fixed increases. When you buy a $2,000,000 property at a 7.5 percent cap, you know that you can count on $150,000 per year for the life of the lease. Many triple-net properties also have rent increases of 1 to 3 percent per year built-in. They provide some growth, but don't necessarily keep up with inflation. However, this is no different from buying a corporate, Treasury or municipal bond with a fixed rate of return.

Pro: Long-Term 100% Occupancy Con: Risk of 100% Vacancy Most triple net properties come on the market with a lease of at least 10 years, with some having initial terms as long as 25 years. This gives you a long time during which you don't have to worry about partial or full vacancy. The drawback is that when the lease does expire, it's an all-or-nothing proposition. The same occurs in the event of a tenant default, although careful due diligence before purchase can reduce the risk of this occurring.

Pro: Attractive Cap Rates Con: High Price Relative to Underlying Value Single tenant properties typically trade at attractive cap rates that are hundreds of basis points above comparable non-real estate investments. They're also frequently priced lower than more traditional investment real estate alternatives on a cap rate basis. A large portion of their value comes from their income stream, though, meaning that they could lose value when vacant or as their remaining lease term decreases.

Pro: No Management Con: CapEx at Rollover True triple net properties are structured so that the owner has no responsibilities whatsoever during the lease period, while others transfer some capital expenditures to the owner. In either case, the ownership experience is very different from traditional real estate. However, when the lease rolls over, owners have to get involved in the re-leasing process and in any necessary capital expenditures to prepare for a new tenant.

What do you see as the benefits and risk?

Buy a NNN Property

Contact Thomas Morgan, CCIM Triple Net NNN Broker at 1-866-539-1777

Broker BS or Good Salesmanship?

I had inquired about a portfolio of net leased reatuarants. The NNN deal is listed by "one of the big" firms and I received back an email with this below the property information:

As I stated earlier, if your clients like the deal it will be getting done at list price. Take a look at the comps, because they do a solid job of justifying our cap rate.
Let me know, if you have any questions. They would need to have an offer in by this coming Monday at the latest.

In my eyes, at least 75% of it is BS. Yes, it could be called good salesmanship and trying to get the highest price for the seller; which is fine, he is doing is job then. However, in my experience, this is classic false urgency. It's like when I submitted an LOI on a Walgreens in Pine Bluff Arkansas in Dec 2012 and they say they have 6 offers above list price and it will close before end of 2012 all cash. Sure. It has been back to market at least three times since then and may even still be for sale today.

Yes, the net lease market is hot. But my clients are smart, know what they want and if they like it they will act fast and make an offer based on their underwriting. If we wanted your input we would ask.

More power to the broker if they have several offers at list price by Monday however I suspect I will see that deal at least 2 or more times in email blasts etc.

Current NNN Cap Rates

Here is a great chart of current asking cap rates for single tenant NNN deals. It is sorted by NNN tenant and NNN year built. Originally published in Western Real Estate Business May 2013. Data by Boulder Group.

Agreed: "Net Lease Market Remains White Hot"

Cap rates for the single tenant net leased market remained near historic lows for retail, office and industrial sectors in the first quarter of 2013. Cap rates for net lease office and industrial properties declined while retail cap rates remained at 2012 fourth quarter levels.

via Net Lease Market Remains White Hot | Commentary content from National Real Estate Investor.

Dollar General to open 635 stores in 2013

Discount retail store company Dollar General Corp., announced Wednesday that it would open 635 new stores this year and add 6,000 new jobs.

via Dollar General to open 635 stores, add 6,000 jobs - Businessweek.

Buy a NNN Dollar General For Sale

IMMEDIATE NNN BUYER NEEDS

We represent clients looking for matching NNN properties: Buyer #1: Walgreens with 15 or more years firm term. Anywhere in US. Price and cap rate dependent on location and term up to $8M.

Buyer #2: Tractor Supply, anywhere in US, price and cap rate dependent on location, term and lease type. Former absolute net leases preferred but would look at brand new NN leases.

Buyer #3: Bite size ($300k to $500k) NNN deal anywhere in US with credit tenant, 5 years minimum on term, 7% cap or higher.

Off-market deals preferred. Have seen everything on Loopnet. No daisy-chains please.

Call or email Thomas Morgan, CCIM with matching NNN properties. 1-866-539-1777

"Ignore the Recession" - More reasons to buy a Net Leased TSC

TSC is one of my favorite NNN tenants. Nice buildings, great locations, solid financials, long leases, low management for owners; the list goes on and on. ABC News Nightline did a segment this week of why TSC is a "Recession Proof Retailer". TSC's internal strategy has been to "ignore the recession". It appears to have worked.

VIDEO:

[Buy a NNN TSC Property]

Here is a link to TSC's (TSCO) five year stock price.

Buy a Tractor Supply NNN Property

NNN Properties and Your Future

NNN properties are a popular avenue for commercial real estate investment. These are typically single-tenant retail properties where the tenant is responsible for paying real estate taxes, providing their own property insurance and taking care of all property maintenance. Tenants take care of these expenses in addition to other monthly costs such as rent and utility payments. Part-time investors can find NNN properties to be an appealing real estate investment option. It offers a guaranteed stream of income from a real estate investment while also absolving the investor of carrying out many day-to-day management responsibilities for the property.

Other advantages NNN properties offer are significant. An investor can lock in a long-term lease with a tenant who sets up shop in NNN properties. They can enjoy tax benefits that come from investing in commercial or residential real estate. Finally, successful NNN properties can act as a gateway for securing additional financing to use on other investments.

There are risks in leasing out triple net properties to the wrong tenant. An investor needs to know how to identify a good tenant versus a bad tenant. Assessing the worthiness of any tenant requires an investor to examine a company's business model and the state of its finances. Signing up a tenant in haste can result in disaster for any investor.

A company's credit rating offers an indicator of risk for default. While no investments outside of a federal bond offer a zero percent default rate, a tenant possessing an investment grade credit rating presents less of a risk for NNN properties.

Leasing NNN properties to a company essentially provides them capital. An investor needs to know if their tenant can guarantee long-term success with that capital. Investors should examine multiple criteria when choosing tenants for their triple net properties. They should examine a company's debt to equity ratio, operating margins, the number of stores it operates, the outlook for that industry and how the company is managed.

Investors in NNN properties should also take into account other factors. A successful investment can hinge on everything from location and building size to economic conditions for a particular industry. Triple net properties work best for a smart investor who buys in the right location and selects a low-risk tenant.

Knowing local market conditions is essential for any serious investor. It is important to pay attention to everything from the employment rate to median income in a community before selecting a property. A bad investment can leave an investor with an empty building that is essentially a money pit.

In the end, NNN properties are a great passive income investment that produce low risk yields of 7% or more with little investor oversight and involvement. Contact Thomas to find out more about NNN properties or to buy/sell a NNN property: 1-866-539-1777 or e-mail.

TMO sells $12M Walgreens Property

In mid August, TMO represented the buyer of a northern California NNN Walgreens property. The property sold for $12,184,846 and is leased on an absolute triple net basis to Walgreens (Ticker: WAG) on a 75 year lease with 24 firm years remaining.  The buyer was a privately held real estate investment company from New York who was in a 1031 Exchange.  The seller was represented by Capital Pacific's San Francisco office.  The low leverage transaction was financed by Lafayette Life Insurance Company  which was placed by Ed Isola from Isola & Associates.

For further details about the cap rate and financing terms, please contact Thomas Morgan, CCIM via email or toll free at 1-866-539-1777.

Buy a NNN Walgreens

We sell Walgreens throughout the entire U.S.! Ask about a FREE no obligation NNN consultation.

Contact TMO to find out more about the benefits of Walgreens Real Estate Investments.

1.866.539.1777