Pension funds expect commercial real estate to generate annual returns of over 7.5% for next three years. Expected yields are higher for apartments and industrial commercial real estate.
National Real Estate Investor magazine reported this study by NCREIF:
Today a 10-year government bond would yield a return of approximately 1.5 percent, while a net lease building offers returns from 5 percent to 8.5 percent or greater. There is also little risk associated with class-A net lease properties—as long as the location is good and the building is well-maintained there will always be tenants willing to sign leases even if the existing occupant leaves. This inspires greater confidence in conservative investors than the recently volatile stock market.
TMO is pleased to have represented a private investor in the purchase of a NNN leased Tractor Supply property in Texas. The all cash transaction closed in under 30 days for $2,242,500 at a cap rate of 8%.
"Tractor Supply (TSCO) is a great reliable tenant with a solid business model which provides my client with peace of mind for years to come." says Thomas Morgan, CCIM. "TSC's may be in smaller markets but that is where their customers are and they serve the rural farming towns perfectly. Compared to a NNN Walgreens or fast food NNN investment, TSC's have a lot of residual value in the real estate as they are on large lots, usually 4-5 acres and have decent size buildings of around 20,000 sf built of block."
Marcus Millichap represented the Seller.
The "What does NNN stand for in real estate?" has moved to this page: What is Triple Net NNN? Triple net lease definition
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