NNN Lease Financing
NNN Lease and Single Tenant Net Lease Rates - Rates updated July 26th, 2024
| Loan Product | Starting Rates | LTV | |
|---|---|---|---|
| 5 Year Fixed Rates | 6.13% | Up to 75% | Get Free Quote |
| 7 Year Fixed Rates | 6.16% | Up to 75% | Get Free Quote |
| 10 Year Fixed Rates | 6.23% | Up to 75% | Get Free Quote |
We specialize in making commercial mortgage loans for single tenant triple-net leased properties. These loans are sometimes called NNN lease financing, triple net lease financing, net leases, or single tenant lease financing. These loans are secured by properties occupied by one single tenant with an investment grade credit rating such as Walgreen’s or CVS, or non-credit tenants with acceptable financial statements. Our rates are extremely competitive, and we can offer fixed rates that match the lease term. Other examples of NNN leases that we have financed include: AutoZone, CVS Drug Stores, Dollar Tree, Family Dollar, Dollar General, Advance Auto Parts, O’Reilly Auto Parts, Starbucks, Tractor Supply, Walgreens and Sherwin Williams. We will also finance single tenant franchise locations such as Dunkin Donuts and McDonalds, as long as the franchisee provides acceptable financial statements.
Benefits of our NNN Lease Financing program:
Triple Net Lease Rates start as low as 6.13% (as of July 26th, 2024)
• A commercial mortgage broker with over 30 years of lending experience
• Single tenant loans up to 75% LTV
• No upfront application or processing fees
• Simplified application process
• Terms and amortizations up to 30 years
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
• Low stepdown prepayment penalties
• Non-recourse and partial-recourse options available
• Fixed rate loans up to existing lease term
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NNN Lease Loan Outlook for 2024
The real estate market has experienced significant shifts over the past few years, and the outlook for NNN lease loans in 2024 is shaped by various factors including economic conditions, consumer behavior, and trends in commercial lending. As we move forward, investors and lenders are focusing on stability and long-term income streams, making NNN leases an attractive option.
One of the major trends influencing the NNN lease market in 2024 is the continued economic recovery, which has revitalized various sectors of commercial real estate. Job growth has been robust, particularly in sectors like technology and healthcare, which has spurred demand for office and industrial spaces. This demand has translated into increased interest in NNN lease properties, as investors seek stable, long-term returns with minimal risk.
Commercial mortgage rates for NNN lease loans in 2024 remain competitive. While interest rates have seen some fluctuations due to the Federal Reserve's policies aimed at controlling inflation, they are still relatively low compared to historical standards. This environment provides a favorable backdrop for investors seeking to finance NNN lease properties. Lenders are generally optimistic about the commercial real estate market, but they are also exercising caution, particularly in sectors that have seen slower recovery, such as retail and hospitality.
The industrial sector continues to perform strongly in the NNN lease market. The rapid growth of e-commerce has driven strong demand for industrial and warehouse space. This trend is expected to persist throughout 2024, with industrial properties receiving attractive commercial mortgage rates due to high demand. As a result, sales prices for suitable industrial spaces have increased significantly.
The retail sector, although experiencing a gradual recovery, faces a more challenging environment. The rise of e-commerce and changing consumer behavior continue to impact retail properties. Lenders remain cautious, and while they offer loans at competitive rates, the terms are not as favorable as those for other asset classes. High leverage loans for retail properties are particularly difficult to obtain.
The office sector presents a mixed outlook. While some areas have seen a resurgence in demand due to companies bringing employees back to the office, others are still grappling with high vacancy rates as hybrid and remote work models persist. Lenders are carefully evaluating office property loans, balancing the potential for higher returns against the risks associated with changing work patterns.
The demand for NNN lease properties with strong tenants, such as CVS, Walgreens, and Dollar General, remains high. These properties offer long-term, stable income streams and are considered lower risk investments. Lenders are favorably inclined towards financing these properties, offering competitive terms to qualified borrowers.
In 2024, the availability of mortgage capital and interest rates for NNN lease loans will continue to be influenced by the property type and location. Borrowers seeking NNN lease loans for properties in prime locations with national credit-rated tenants will find it easier to secure attractive financing terms. Conversely, properties in tertiary markets or those with less stable tenants may face challenges in obtaining financing.
Overall, the outlook for NNN lease loans in 2024 is positive. Investors have opportunities to leverage competitive commercial mortgage rates and reinvest in stable, income-generating properties. However, careful consideration of market conditions, property types, and tenant stability is essential to maximize the benefits of NNN lease financing in the coming year.
Recent Trends in NNN Lease Financing
In recent years, investors in the net lease market have increasingly sought out quality triple net investments that provide long-term income streams with minimal risk. This shift towards lower risk and greater certainty is driven by economic conditions and market volatility. Investors are particularly interested in properties with strong tenants backed by major brands, such as CVS and Walgreens, which offer guaranteed income streams and lower investment risks.
Dollar General continues to be a highly attractive option for NNN lease investors. The company has consistently expanded its footprint, with plans to open additional locations across the United States. Dollar General’s focus on low prices and consumer convenience has allowed it to thrive in the e-commerce era, making it a sought-after tenant for NNN lease properties.
Overall, the best properties to invest in now are NNN properties with strong tenants. These tenants are corporately backed by large, financially stable companies, providing some of the safest investments in commercial real estate. Lenders are aggressively offering net lease loans on single tenant occupied properties, making this an opportune time for investors to secure financing for these valuable assets.
Additional Benefits of Single Tenant Net Lease Loans
There are many benefits to purchasing net leased properties and obtaining NNN financing. Triple net leased properties make it much more feasible for single tenant retail investors to purchase properties that can provide long term revenue streams. Here are a few reasons why you should consider a single tenant net leased property for your next purchase:
• Triple net leases typically provide an investor with a single tenant on a long-term lease. It is very normal for a these tenants to have a lease with over 10 years remaining on the term. These long-term leases provide the property owner a more stable source of rental payments. Short term leases in local retail centers can be disastrous for an investor. If the lease ends and the tenant does not renew, it could take a long time to fill the vacancy. Triple net tenants provide a certain level of certainty that rental payments will be made for a significant period of time.
• NNN leases significantly reduce the amount of time, energy and money that the property owner has to put into his or her building. With triple net leases, the tenant deals with property maintenance and pays taxes and insurance leaving the property owner with much more time and capital to invest in other properties.
• Additionally, net leases are very predictable and simple. Both parties are aware of the structure and the terms of a net lease upon signing the lease. This makes it simple to know what the rental income or payment will be throughout the entire term of the lease. All rent increases are on NNN properties are agreed to upfront by both parties, providing a stable income stream for investors.
• Properties with NNN leases are easier to finance than local shopping centers. Many lenders love lending on single tenant properties such as CVS, Walgreens, Dollar General, Family Dollar and Dollar Tree. Investors looking to invest in retail can get much better rates and terms on these deals than on other retail properties. While we aren’t very bullish on financing retail centers (with local tenants on short term leases), we are very actively offering net lease financing.
In our view, the best properties to purchase now are NNN properties with strong tenants. These tenants are corporately backed by big companies with financials available to the public. Lenders are aggressively offering net lease loans on single tenant occupied properties today. Some of the best net lease financing and triple net loans can be obtained on properties with top tenants such as CVS, Walgreens, Dollar Stores, Sherwin Williams, Fresenius Medical, etc. These tenants provide property owners some of the safest investments in commercial real estate and some of the best triple net mortgage terms.
Overall, we highly suggest that retail investors look into considering single tenant and triple net properties as part of their investment portfolio.