Start here before you buy. A triple-net lease moves taxes, insurance and maintenance to the tenant, which is what makes the income passive — but "passive" is earned in the underwriting, not assumed. The asset is a credit and a lease wrapped around a building. We read the credit first.
An NNN lease property is, in plain terms, a building you own where the tenant pays the property taxes, the insurance and the maintenance on top of the rent. You collect a net check. The discipline is making sure that check is durable.
"NNN" stands for the three nets — net of taxes, net of insurance, net of maintenance. In a true triple-net lease the tenant carries all three, so your rent arrives without the operating drag a landlord normally absorbs. That is why the income is called passive: there is no roof to budget, no insurance renewal to chase, no property-tax appeal to file. But the word hides a spectrum. A lease can be NN (the landlord keeps roof and structure), NNN, or absolute net (the tenant owns every dollar of risk to the slab). Knowing which one you are buying is the difference between a coupon and a part-time job.
Most single-tenant net-lease income comes from a familiar set of formats: quick-service restaurants (Starbucks, Chipotle, Raising Cane's), auto parts and service (AutoZone, O'Reilly, Take 5), dollar stores (Dollar General, Family Dollar), pharmacy, and fuel and convenience. Each carries its own risk signature — a QSR lives or dies on store sales, a fuel site on the environmental file, a dollar store on the parent's credit. The format tells you where to look; the lease and the credit tell you what it is worth. The full tenant criteria sit on the NNN advisory page.
Who signs the rent and can they pay it for the full term. Investment-grade corporate prices tighter than a single franchisee; read the actual guarantor, not the brand on the sign.
Ten-plus years remaining with built-in rent bumps protects against inflation and re-leasing risk. Flat rent for fifteen years quietly loses value every year.
Own the land, not a leasehold over someone else's. The irreplaceable corner is what holds value if the tenant ever leaves.
Traffic counts, access and rooftops decide whether the tenant renews — and at what rent. The real-estate fundamentals outlive the lease.
Absolute net vs. NN. If the landlord still owns roof and structure, that future capital cost belongs in your underwriting today.
Rent as a share of store sales tells you whether the location can actually carry the rent. Thin coverage is a renewal problem waiting to happen.
The work is to separate the real income from the marketed one. We read the guarantor behind the lease, the remaining term and the escalation schedule, the rent-to-sales coverage at the unit, and the quality of the dirt if the tenant ever goes dark. The cap rate is the last thing we look at, not the first — because the same headline cap can wrap a corporate-guaranteed twenty-year lease or a single-operator deal three years from a renewal decision. Those are not the same asset, and they should not trade at the same price. The thesis, tenant criteria and how we work are on the insights and advisory pages.
A single-tenant building where the tenant pays property taxes, insurance and maintenance on top of rent, so the landlord collects a net income with little to no operating responsibility.
Typically the mid-5% to high-7% range, depending on tenant credit, remaining lease term, escalations and location. Investment-grade tenants on long leases price tighter; franchisee or shorter-term deals price wider.
The tenant does, in a true triple-net lease. In a double-net (NN) lease the landlord usually keeps roof and structure, so read the lease to know exactly which costs transfer.
Largely yes when the lease is absolute net, the term is long and the tenant is corporate-guaranteed. The passivity is earned in the underwriting — a weak credit or a retained-roof lease can make it far less hands-off.
Send me the OM and the rent roll. I'll tell you what the real cap is, where the risk sits, and whether it's worth pursuing — independent, buyer-side, no obligation.
Email [email protected]
Direct +1.786.603.3075
Office 1390 Brickell Ave, Suite 104 · Miami, FL 33131
NNN lease properties are one part of a broader single-tenant net-lease mandate. See the full thesis, tenant criteria and how I work.
NNN Commercial Advisory →