Basic Elements:
- Nationally branded tenants
- New construction
- Strong credit quality tenants
- Triple-net leases
- Long-term leases
- Fundamentally sound real estate markets
Nationally branded tenants
We conduct a thorough analysis of each company’s business model, credit worthiness, industry position, profitability and staying power. Nationally branded tenants have a broad reach across the United States and typically dominate in their field.
New construction
A new building at the beginning of its useful, economic life will be relatively maintenance free for the first several years. It will also typically have construction warranties in place covering items such as the roof, HVAC system and others.
Strong credit quality tenants
We only deal with financially strong, well established companies who have a good track record and credit history. We also analyze the following areas for each corporate tenant:
- the company’s business revenue sources, key products & services
- the industry in which the tenant competes
- comprehensive financial statements (including balance sheets and cash flow analysis)
Triple-net leases
A triple-net (NNN) lease provides for a more passive and hassle free investment for the buyer(s). With this type of lease the tenant is responsible for paying the property taxes, insurance and maintenance of the property.
Long-term leases
By offering properties that typically have ten or more years remaining on the initial lease term the owners know that they have reliable monthly cash flow for a long period of time. Most leases also have multiple renewal options built-in that extend the lease for many years beyond the initial term.
Fundamentally sound real estate markets
We perform extensive demographic research and market analysis on each area where these properties are located to make sure that the business that is leasing the property is likely to succeed in that location and that the real estate has the potential to appreciate in value over time. One of our principals also personally visits each site to inspect the property and evaluate the surrounding community.
Other items that we review include:
- Phase I Environmental report
- Title report
- Primary lease term
- Renewal options
- Property taxes
- Maintenance obligations