Under a true triple net lease agreement, the tenant (or lessee) pays rent to the landlord (lessor), and in addition pays all taxes, insurance and property maintenance, including structural elements such as roof repair. Triple net leases are often used in Sale/Leasebacks, a financing technique in which a business sells the property on which it operates its business, but continues to operate the business in place under the triple net lease, paying rent to the new landlord. This can be an advantageous way for a company to raise capital and/or reduce debt.

Although rents are usually lower on triple net leases than other forms of lease agreements, a triple net leased property can be optimal for real estate investors seeking passive income. In a Sale/Leaseback transaction, the parties will often agree to a new lease which begins at the close of escrow and runs 10-20 years. It can also include multiple multi-year extensions. Triple net investment properties that are leased to well known brand retailers and restaurants are routinely available.

From an investor’s point of view, a triple net leased investment can provide long-term passive income from a stable, credit-worthy tenant in a market that provides some liquidity. Each investor must consider the proper vehicle for their portfolio needs and their respective financial plan.

Please call or email me about available triple net properties.