Triple Net Properties An Opportunity to Invest in Commercial Real Estate

Written by Economic Development Jobs on April 7, 2018. Posted in Triple net investment, Triple net lease depreciation, Triple net property

Why invest in nnn properties

There is an increasing demand for commercial real estate industry services. This is partially due to the overall economy’s recovery, which has led to more construction projects. Other industries have also expanded, including new business ventures. This situation has also resulted in new jobs being available across a variety of sectors.

Recent Data on Commercial Real Estate Construction

Throughout the five-year time frame of 2012 to 2017, the annual growth rate for a variety of commercial real estate construction projects was 3.9%. United States Census data revealed that hotel and office-related construction experienced a considerable amount of growth.

Over the three three-year time period from December 2014 to December 2017, spending increased for these specific types of projects:

  • Hotel-related construction increased by 59%
  • Office-related construction increased by 43%

The approximate value of the completed commercial building projects in 2016 was $74.24 billion. This figure alone underlines the considerable amount of growth experienced by the commercial real estate industry. Furthermore, it is also a strong indicator for individuals that are interested in making commercial real estate investments.

Recent Data on Commercial Real Estate Investments

Commercial real estate investments substantially increased during 2015. Data shows that these investments were up by 85%, which is a considerable growth percentage. Given this, more individuals and investment groups are considering the benefits of investing in commercial property, such as triple net properties.

A Brief Overview of Triple Net Leases

When someone chooses to be a lessee on a triple net lease agreement, there are three areas, or nets, for which they will be responsible. Basically, the lessee agrees to pay the following costs for one or more buildings:

  • Real estate taxes
  • Building insurance
  • Building maintenance

The lease rate will depend on a variety of factors, of course. One of the factors that will determine the lease rate may include the number of properties that the lessee is leasing. Another contributing factor may be the duration of the lease.

How to Qualify to Be a Triple Net Lease Investor

When someone wants to invest in one of these types of offerings, they need to be accredited. While their net worth needs to be a minimum of $1 million, this does exclude their primary residence’s value. It also excludes $200,000 of income. If an individual meets all of these criteria, then it would be a good idea to learn more about where to invest in triple net properties.

Why Invest in Triple Net Properties?

There are several advantages to investing in triple net properties. Just one of the indicators that this can be a sound investment is due to the high demand for office space during 2017′s third quarter. This demand sparked higher tenant interest within the industries that required office space to conduct some or all of their business. Activity attained a two-year high at this point, with 62.4 million square feet of office space being leased.

There are, of course, other advantages to investing in triple net properties. If you’re planning to diversify your financial portfolio or create a new income stream, this type of investment may be of interest. When you schedule a consultation to learn more about available investment opportunities, you will also have the opportunity to learn more about lease rates and other important details.

Leave a comment

You must be logged in to post a comment.