What are NNN Properties?

What are NNN Properties?

NNN Properties are typically free standing buildings that are leased to tenants for a 10 to 25 year term. NNN Properties offer the benefit of little or no management responsibilities as the tenant pays for all, if not most of the expenses. The investor receives their rent with little to no other involvement.

Tenants in NNN Properties are divided by both quality and type of businesses they are in. Qualitatively NNN Properties have either credit or non credit tenants. The most desirable (least risk) NNN Properties have investment grade (rated BBB- and better) credit tenants.

Non credit tenant NNN Properties have tenants that are not credit rated. These tenants frequently are regional or local businesses or companies that are unrated. Some tenants are considered credit worthy yet are unrated because they carry no debt on their books. Click Tenant Ratings for list of tenants for NNN Properties.

Who Buys NNN Properties?

NNN Properties are appealing to those who wish to have outright ownership of their commercial real estate investments and have little to no management responsibility. The alternative ways of owning non management commercial real estate would be to own a security in the form of a mutual fund or REIT or invest in fractional ownership Tenant in Common properties.

A major advantage of 100% direct ownership is control and the ability to defer future capital gains by doing a 1031 exchange when the property is sold. For many investors the lack of immediate liquidity inherent in NNN Properties is offset by the lack of volatility NNN Properties offer when compared to a securitized investment. Investors should carefully consider their need for liquidity when considering investing in NNN Properties.

J. Michael Sigrist

Compass Investment Properties, Inc.

861 W. Morse Blvd. #250

Winter Park, Fl. 32789

Office 407-647-5111

Fax 407-629-9220

Cell 407-953-2605

mike@compassorlando.com