What Are Single Tenant Net Leased Investments?

Many real estate investors are turning to long-term triple net leases (NNN) as a solution to the management issues that often come with owning investment properties. With a NNN lease, the single tenant is responsible for paying all expenses related to the property, including taxes, insurance, and maintenance. This structure creates a single tenant net leased (STNL) property.

This can provide investors with a hassle-free investment, particularly when the tenant is a creditworthy national company. Some of the companies that are often sought after for NNN leases by investors include those with a net worth over $1 billion, such as Walgreens, Walmart, O’Reilly, Jack-in-the-Box, Barnes and Noble, Winn-Dixie, 7-Eleven, Inc., and Sherwin Williams.

In addition to the management benefits and minimal risk associated with NNN leases, investors may also consider the potential tax benefits of 1031 exchanging into a single tenant NNN property. A 1031 exchange, also known as a "like-kind" exchange, allows an investor to sell a property and defer paying capital gains taxes on the sale by using the proceeds to purchase a similar investment property.

By exchanging into a single tenant NNN property, investors may be able to take advantage of the steady and predictable cash flow that these properties can provide, while also potentially benefiting from the tax deferral of a 1031 exchange. It is important for investors to consult with a qualified tax professional to understand the specific tax implications of a 1031 exchange and to ensure that all requirements for the exchange are met.

Credit: The Kase Group

Circle K
2901 N Fourth Street
Flagstaff, AZ

• Price: $700,000

• Cap Rate: 6.51%

• NOI: $45,570

• Rentable SQFT: 2,632 SF

• Year Built: 1964

• Lot Size: 0.2 +/- Acres

• Lease Type: Absolute NNN

Need financing for a single tenant net leased property? Learn more about our Retail Loan Programs!