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TRIPLE NET REAL ESTATE 
INCOME INVESTMENTS
Presented by Ron Filian and Tyler Ryan
CBC Group,
Inc.
This document are original works and owned by the publisher and protected by
copyright law. All readers of this document shall comply to the ownership rights of
the author. 09/01/2010
What is a Triple Net Investment?
 A triple net investment (Net-Net-Net or NNN) is a lease
agreement on a property where the tenant or lessee agrees to
pay all real estate taxes, building insurance, and maintenance
(the three 'Nets') on the property in addition to any normal
fees that are expected under the agreement (rent, etc.)
 In such a lease, the tenant or lessee is responsible for all
costs associated with the repair and maintenance of any
common areas.
 Ownership of the Real Estate investment receives a monthly
income check from rental income and enjoys favorable tax
benefits.
CBC Group, Inc.
www.triplenetinvestors.com
Why Real Estate?
 Investors have come to understand the critical role that
diversification plays in creating an efficient investment
portfolio. With recent challenges in the market, a number of
investors are considering other investment options, such as
real estate.
 Many investors now consider real estate to be the “fourth
asset class”, in addition to stocks, bonds and cash.
 Commercial real estate could be a valuable component of an
investment portfolio.
CBC Group, Inc.
www.triplenetinvestors.com
Diversify Your Portfolio
 Solid returns like a dividend payment or an annuity with total
control.
 No large built in management fees.
 Investment returns similar to REITS and other large
institutional investors.
 Infinite tax deferral of appreciation gains with qualified 1031
rollovers.
CBC Group, Inc.
www.triplenetinvestors.com
Advantages of NNN Investment Properties
CBC Group, Inc.
www.triplenetinvestors.com
What This Means To You
Ownership Receives a
Net Monthly Rental
Income check.
Tenant Pays the Agreed Upon
Rent and Takes Care of All
Other Costs Associated With
the Upkeep of the Building
(including RE Taxes).
CBC Group, Inc.
www.triplenetinvestors.com
NNN Investment Due Diligence
CBC Group, Inc.
www.triplenetinvestors.com
What is a CAP Rate?
 The Capitalization rate, or Cap Rate, is the ratio used to
estimate the value of income producing properties.
 To calculate the Cap Rate of a given property, you simply
take the Net Operating Income (NOI) of a property and divide
by the purchase price or value of that property.
CBC Group, Inc.
www.triplenetinvestors.com
Cap Rate Examples
 Example 1:
 A property has a NOI of $140,000 and a value of $1,400,000.
What is the cap rate?
 ANSWER: $140,000 / $1,400,000 = 10% Cap Rate
CBC Group, Inc.
www.triplenetinvestors.com
 Example 2:
 A property has a NOI of $245,000 and a Cap Rate of 9.50%.
What is the value of this property?
 ANSWER: $245,000 / .095 = $2,578,947
Current Investment Opportunities
 Chipotle / $1,333,333
 Location: Chicagoland Area
 6.75% Cap Rate
 Price per Square Foot: $601.68
 Current Annual Rent: $90,000
 Rent per Square Foot: $40.61
 Lease Term Remaining: 19 years
 Lease expiration: 01/30/2029
 Rent Increases: 10% every 5
years
 Building Size: 2,216 Square Feet
CBC Group, Inc.
www.triplenetinvestors.com
Current Investment Opportunities
 Arby’s / $1,018,000
 Location: Central Illinois
 8.25% Cap Rate
 Price per Square Foot: $348.75
 Current Annual Rent: $84,000
 Rent per Square Foot: $28.78
 Lease Term Remaining: 20 Years
 Lease expiration: 09/30/2030
 Rent Increases: 10% every 5 years
 Building Size: 2,919 Square Feet
 Options: (5) 5 year options
CBC Group, Inc.
www.triplenetinvestors.com
Current Investment Opportunities
 Walgreens / $8,410,000
 Location: Chicago
 6.60% Cap Rate
 Price per Square Foot: $671.99
 Current Annual Rent: $555,000
 Rent per Square Foot: $44.39
 Lease Term Remaining: 74 years
 Lease Expiration: 05/30/2084
 LEED Certified
 Building Size: 12,515 square feet
 Lot Size: .82 Acres
CBC Group, Inc.
www.triplenetinvestors.com
Current Investment Opportunities
 Dollar General /
$1,277,778
 Location: Chicago Area
 9.00% Cap Rate
 Price per Square Foot: $136.30
 Current Annual Rent: 115,000
 Rent per Square Foot: $12.27
 Lease Term Remaining: 7 years
 NN Lease (Landlord responsible for
roof and structure)
 Lease expiration: 05/31/2017
 Building Size: 9,375 Square Feet
CBC Group, Inc.
www.triplenetinvestors.com
Who We Are
 CBC Group is a local multi-disciplinary firm with an
integrated approach to financial business services. A trusted
resource providing solutions for your business.
 An independently owned firm, we act as fiduciaries for your
business.
 Experienced professionals with diverse financial backgrounds
that collaborate to provide a wide range of services to our
clients.
CBC Group, Inc.
www.triplenetinvestors.com
What We Do
CBC Group, Inc.
www.triplenetinvestors.com
Working With Us
 Licensed Professional team with financial advisory
experience.
 In depth knowledge of the market and industry research
on quality national tenants.
 A proprietary database of active lenders to leverage your
investment opportunities.
 We only work with qualified investors.
CBC Group, Inc.
www.triplenetinvestors.com
The 4 Step Process
CBC Group, Inc.
www.triplenetinvestors.com
1. Pre-Qualify – An in depth review of investor’s profile,
personal financial statement and goals for income and
risk tolerance.
2. Review Investments – The investor will be provided
with a list of pre-screened properties that are matched
to their profile.
3. Qualify With Lender – We will package the investor
and pre-screened property selections to qualified
lenders that offer the best financing options.
4. Letter of Intent – Investor makes offer and we begin
the negotiation process.
Contact Us
 CBC Group (847) 839.8810
 Ron Filian (847) 814.8820
ron@triplenetinvestors.com
 Tyler Ryan (847) 804.4301
tyler@triplenetinvestors.com
CBC Group, Inc.
www.triplenetinvestors.com

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Triple Net Real Estate Income

  • 1. TRIPLE NET REAL ESTATE  INCOME INVESTMENTS Presented by Ron Filian and Tyler Ryan CBC Group, Inc. This document are original works and owned by the publisher and protected by copyright law. All readers of this document shall comply to the ownership rights of the author. 09/01/2010
  • 2. What is a Triple Net Investment?  A triple net investment (Net-Net-Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three 'Nets') on the property in addition to any normal fees that are expected under the agreement (rent, etc.)  In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any common areas.  Ownership of the Real Estate investment receives a monthly income check from rental income and enjoys favorable tax benefits. CBC Group, Inc. www.triplenetinvestors.com
  • 3. Why Real Estate?  Investors have come to understand the critical role that diversification plays in creating an efficient investment portfolio. With recent challenges in the market, a number of investors are considering other investment options, such as real estate.  Many investors now consider real estate to be the “fourth asset class”, in addition to stocks, bonds and cash.  Commercial real estate could be a valuable component of an investment portfolio. CBC Group, Inc. www.triplenetinvestors.com
  • 4. Diversify Your Portfolio  Solid returns like a dividend payment or an annuity with total control.  No large built in management fees.  Investment returns similar to REITS and other large institutional investors.  Infinite tax deferral of appreciation gains with qualified 1031 rollovers. CBC Group, Inc. www.triplenetinvestors.com
  • 5. Advantages of NNN Investment Properties CBC Group, Inc. www.triplenetinvestors.com
  • 6. What This Means To You Ownership Receives a Net Monthly Rental Income check. Tenant Pays the Agreed Upon Rent and Takes Care of All Other Costs Associated With the Upkeep of the Building (including RE Taxes). CBC Group, Inc. www.triplenetinvestors.com
  • 7. NNN Investment Due Diligence CBC Group, Inc. www.triplenetinvestors.com
  • 8. What is a CAP Rate?  The Capitalization rate, or Cap Rate, is the ratio used to estimate the value of income producing properties.  To calculate the Cap Rate of a given property, you simply take the Net Operating Income (NOI) of a property and divide by the purchase price or value of that property. CBC Group, Inc. www.triplenetinvestors.com
  • 9. Cap Rate Examples  Example 1:  A property has a NOI of $140,000 and a value of $1,400,000. What is the cap rate?  ANSWER: $140,000 / $1,400,000 = 10% Cap Rate CBC Group, Inc. www.triplenetinvestors.com  Example 2:  A property has a NOI of $245,000 and a Cap Rate of 9.50%. What is the value of this property?  ANSWER: $245,000 / .095 = $2,578,947
  • 10. Current Investment Opportunities  Chipotle / $1,333,333  Location: Chicagoland Area  6.75% Cap Rate  Price per Square Foot: $601.68  Current Annual Rent: $90,000  Rent per Square Foot: $40.61  Lease Term Remaining: 19 years  Lease expiration: 01/30/2029  Rent Increases: 10% every 5 years  Building Size: 2,216 Square Feet CBC Group, Inc. www.triplenetinvestors.com
  • 11. Current Investment Opportunities  Arby’s / $1,018,000  Location: Central Illinois  8.25% Cap Rate  Price per Square Foot: $348.75  Current Annual Rent: $84,000  Rent per Square Foot: $28.78  Lease Term Remaining: 20 Years  Lease expiration: 09/30/2030  Rent Increases: 10% every 5 years  Building Size: 2,919 Square Feet  Options: (5) 5 year options CBC Group, Inc. www.triplenetinvestors.com
  • 12. Current Investment Opportunities  Walgreens / $8,410,000  Location: Chicago  6.60% Cap Rate  Price per Square Foot: $671.99  Current Annual Rent: $555,000  Rent per Square Foot: $44.39  Lease Term Remaining: 74 years  Lease Expiration: 05/30/2084  LEED Certified  Building Size: 12,515 square feet  Lot Size: .82 Acres CBC Group, Inc. www.triplenetinvestors.com
  • 13. Current Investment Opportunities  Dollar General / $1,277,778  Location: Chicago Area  9.00% Cap Rate  Price per Square Foot: $136.30  Current Annual Rent: 115,000  Rent per Square Foot: $12.27  Lease Term Remaining: 7 years  NN Lease (Landlord responsible for roof and structure)  Lease expiration: 05/31/2017  Building Size: 9,375 Square Feet CBC Group, Inc. www.triplenetinvestors.com
  • 14. Who We Are  CBC Group is a local multi-disciplinary firm with an integrated approach to financial business services. A trusted resource providing solutions for your business.  An independently owned firm, we act as fiduciaries for your business.  Experienced professionals with diverse financial backgrounds that collaborate to provide a wide range of services to our clients. CBC Group, Inc. www.triplenetinvestors.com
  • 15. What We Do CBC Group, Inc. www.triplenetinvestors.com
  • 16. Working With Us  Licensed Professional team with financial advisory experience.  In depth knowledge of the market and industry research on quality national tenants.  A proprietary database of active lenders to leverage your investment opportunities.  We only work with qualified investors. CBC Group, Inc. www.triplenetinvestors.com
  • 17. The 4 Step Process CBC Group, Inc. www.triplenetinvestors.com 1. Pre-Qualify – An in depth review of investor’s profile, personal financial statement and goals for income and risk tolerance. 2. Review Investments – The investor will be provided with a list of pre-screened properties that are matched to their profile. 3. Qualify With Lender – We will package the investor and pre-screened property selections to qualified lenders that offer the best financing options. 4. Letter of Intent – Investor makes offer and we begin the negotiation process.
  • 18. Contact Us  CBC Group (847) 839.8810  Ron Filian (847) 814.8820 ron@triplenetinvestors.com  Tyler Ryan (847) 804.4301 tyler@triplenetinvestors.com CBC Group, Inc. www.triplenetinvestors.com

Editor's Notes

  1. A NNN sale-leaseback is a transaction whereby the owner of the properties sells the facility and agrees to sign a long term triple net lease usually somewhere between 10-25 years which goes into effect upon the closing of the transaction. The seller continues to operate the business from the location but now has gained more equity to run and expand the overall business.
  2. Track Record of the Tenant - Find out how many years they have been operating their business and the number of stores they operate. Business experience is also very important. What did they do before owning their own chain, for example… were they managers at other successful similar companies? Strength of the NNN lease guaranty - Don’t be fooled with single entity LLC structures that guarantee the lease. They have little value. Single tenant NNN properties have most of their value in the guarantor of the lease. If the guarantor does not hold major assets or the properties are not investment grade, you should be very cautious. Financing - Even if you receive what looks to be a good deal on your NNN real estate property, you have to make sure the financing is feasible with reasonable rates. If the banks are not comfortable with the credit of the guarantor, they will raise the interest rate which will diminish your return. Financial Strength - Study the past 3 years of the tenants income tax returns, business and personal financial statements if possible. Make sure you see an upward trend to ensure they are a stable tenant. NNN Lease Terms It should be an ‘absolute’ triple net lease whereby the tenant pays for insurance, taxes, repairs and maintenance. Annual rent increases are a must and the majority of NNN properties over every 5 year period have 10% increases. Some have 2% annual escalations and others are flat for 5 years and then increase 10% after 5 years. These are bare minimums keep in mind, and paramount for increased value. It should be an ‘absolute’ triple net lease whereby the tenant pays for insurance, taxes, repairs and maintenance.