The Wall Street Journal ran a story on May 8th about NNN investments. Entitled “Cashing In on a Real-Estate Boom. Most Commercial Properties are Slumping, but ‘Triple Net Lease’ Deals are Hot”, the author covers the NNN story.
Such ventures, known as triple-net-lease properties, are “the best-performing sector of the commercial real estate marketplace,” says David Bailin, head of global managed investments for Citi Private Bank, which serves ultra-high-net-worth clients. “It is the sector that lost the least value [during the recession] and rallied the quickest.”
I think most of the article is good, but I would not agree with the statement that NNN are generating as much as 12% today. For the kind of tenant (highly-rated) and lease length that most investors want, the typical cap rate is about 7.5% (range 7.2% to 7.8%).
Regards, Kathy
