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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. http://nnnbrokersusa.com
NNN Leased Investments
• What are Net Leases?
• Determinants of Value
• Investment Thesis

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. 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

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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. 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

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Value of the Real Estate

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Value of the Real Estate
Location, Location, Location

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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. 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. 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. 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. 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