Net Leased Investments

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An explanation and analysis of net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, and retail credit tenant net leased property.

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  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • net lease, 1031 investment, net leased property, NNN lease, 1031 property, NNN properties, nnn lease property, NNN leased properties, single tenant, single tenant net leased, investment property, single tenant net leased properties, investment property, investment real estate, free standing retail property, commercial net-lease, free standing retail properties, retail real estate, triple net lease, triple net leased, triple-net leased properties, triple-net lease, triple-net leases, net, net property, net, net, net properties, credit retail properties, credit retail property, credit investment property, credit tenant property, credit tenant properties, retail credit tenant net leased property
  • Net Leased Investments

    1. 1. http://nnnbrokersusa.com Brokers USA Sells Triple Net Lease NNN Properties & 1031 Exchange Property NET LEASED INVESTMENTS Gregory Garver – President Brokers USA 1160 Mission St, Suite 812 San Francisco, CA 94103 Tel: (415) 968-6065 Fax: (415) 520-6589 greg@nnnbrokersusa.com
    2. 2. http://nnnbrokersusa.com NNN Leased Investments • What are Net Leases? • Determinants of Value • Investment Thesis
    3. 3. http://nnnbrokersusa.com Single Tenant Net Lease Types N- Property Taxes N- Insurance N- Maintenance • Developer/Landlord Negotiates Lease Terms with Tenant • Tenants can be private companies, franchisees, investment or non- investment grade national corporations, etc. NN- Tenant is responsible for property taxes and insurance NNN- Tenant is responsible for property taxes, insurance and maintenance NNN Advantage = Passive Investment/Cash Flow
    4. 4. http://nnnbrokersusa.com Value Determinants • Value of the Real Estate • Land Value, Building Value (Age of Building and Type of Construction) • Location & Barriers of Entry to the Market • Demographics and economic structure of the community • Is it Truly a Single Tenant, or Multiple Tenants Wrapped into a Single Tenant Net Lease Structure • Value of the Credit Tenant • Current Credit Rating • Expected future financial performance • Past Financial Results • Value of the Lease Itself • Landlord Responsibility for Expenses (NNN vs. NN vs. N) • Length of the Lease • Options to Renew • Rental Increases in the Lease • Current Market Rents
    5. 5. http://nnnbrokersusa.com Value Determinants Tenant credit, locations & fundamentals AutoZone 4,200 stores in the US, Puerto Rico, and Mexico, founded in 1979 Advanced Auto 3,400+ stores in 39 continental states, Puerto Rico and the Virgin Islands O'Reilly's 3,421 stores in 38 states, founded in 1957, went public in 1993
    6. 6. http://nnnbrokersusa.com Not All CVS Pharmacies are Created Equal: • Age and Quality of the Construction • Development Planned in the Surrounding Area • Current and Future Demographic Trends of the Location • Hours of Operation Example: CVS in Ft. Myers, FL – Good Demographics – Excellent Site – Drive-Thru – Sold by the Developer – Brand New Construction Value of the Real Estate
    7. 7. http://nnnbrokersusa.com Value of the Real Estate
    8. 8. http://nnnbrokersusa.com Value of the Real Estate Location, Location, Location
    9. 9. http://nnnbrokersusa.com Market Update Walgreens Starbucks CVS Autozone Dollar General S&P Credit Rating A+ A- BBB+ BBB BB Cap Rate at Purchase 6.75 7.25 7.3 7.25 8.35 Initial Lease Term (Yrs) 20 10 20 20 15 Rent Bumps No Yes No No Yes Cap rate at sale 6.75 8.5 7.3 7.25 8.5 Pre-Tax Internal Rate of Return 8.3% 9.0% 10.0% 9.9% 11.0% Projected returns based on the following: •10 year investment horizon •0% property appreciation for all leases greater than 15 years and sales prices at current cap rates for those under 15 years •30% initial equity down payment for investment grade tenants and 40% for non investment grade. •Market lending rates as of 10/15/10 A sample of prevailing market conditions and projected returns.
    10. 10. http://nnnbrokersusa.com Investment Thesis Cap Rate Spreads • Vs. Cost of Capital Borrowing rates are near historic lows and the proper use of leverage can lead investment grade tenants with long term leases to have as much as 580 bps of greater annual returns over comparable bond yields. • Vs. 10 Year Treasury Bonds Treasury bond yields are near historic lows. Investment grade tenants offer superior risk adjusted returns. Spread to 10 Yr. Treasury Bond Spread to Comparable 10 Yr. Corporate Bond Walgreens 5.7% 4.8% Starbucks 6.4% 5.1% CVS 7.4% 5.8% Autozone 7.3% 5.3% Dollar General 8.4% 4.1% Growth of a $1 Million Dollar Investment $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 $2,200,000 $2,400,000 $2,600,000 $2,800,000 $3,000,000 1 2 3 4 5 6 7 8 9 10 Years Walgreens Starbucks CVS Autozone Dollar General 10 Yr. Treasury
    11. 11. http://nnnbrokersusa.com Investment Thesis Continued Case for NNN Properties • Inflation Hedge Hard assets tend to outperform during inflationary periods • Ideal for 1031 Exchanges • Stable/Predictable cash flows Steady cash flows without paying the current premium placed on the bond sector • Portfolio Diversification Real Estate traditionally has a low correlation to the equity markets. • Corporate Default Rates Moody’s estimates that corporate default rates will fall to 3% (1% for investment grade corporations). • Passive Investment
    12. 12. http://nnnbrokersusa.com COMPANY S&P CREDIT Citibank A+ Walgreens A+ Bank of America A AT&T A McDonalds A 7-Eleven A Home Depot BBB+ COMPANY S&P CREDIT CVS BBB+ Starbucks BBB+ AutoZone BBB Advance Auto BB+ Burger King BB- Rite Aid B- Applebee’s NR CVS/pharmacy Major Single Tenants and Credit Ratings
    13. 13. http://nnnbrokersusa.com The Brokers USA Team Brokers USA 1160 Mission Street Suite 812 San Francisco, CA 94103 Tel: (415) 968-6065 Fax: (415) 520-6589 http://nnnbrokersusa.com Gregory Garver President (415) 225-9894 greg@nnnbrokersusa.com

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