Just in.... 1031 NNN Property Want/Need....
This VIP client is the son-in-law of a long time Exclusive client. We have sold his father-in-law almost $30M worth of NNN properties in several states over the years. (Find out about the VIP and Exclusive Buyer programs here)
“Hey Thomas, I have 600k to 800k laying around that I need to get out of the bank and into an income property. Can finance if needed up to, let’s say, $1.5M. It is a partial 1031 exchange so would like to do something sooner than later. I like what you found my father-in-law for his 1031 exchanges and other investments. The triple net properties really appeal to me. Would like to get as high as cap rate as possible, can go anywhere in US. OK with some risk as I am still young and not afraid to get after it if needed. However, would not mind sitting back and just collecting a monthly check! Thanks, AG”
Today’s Deal Rundown
MAYBE - Denny’s in Ohio, $1.76M 6.25% cap rate.
Pros: Advertised as absolute net with 13 years on term and strong store sales. Good demographics. Larger, almost 1 acre lot. Strong traffic counts of 31k.
Cons: old building - 1970
Status: confirming who guarantees lease and last remodel and to what extent.
MAYBE - 7 year leaseback Boise NNN office $1.16M
Pros: curb appeal, 7 year dress lease, 7% cap ask price, $200 psf, downtown location, high population growth, decent size western MSA, nice bite size deal
Cons: small .28 acre lot, tenant strength
Status: checking on who tenant is, needs more in depth location and market rent analysis
OF INTEREST - 15 year Grease Monkey in IL
Pros: new 15 year absolute net lease, low price point of $620k, under $200 psf, corporate lease, 10% bumps, new branding and remodel.
Cons: maybe franchisor/franchisee issues, single use building, lot size unknown (for now), unable to assess exact location
PASS - 20 year NNN Salad N Go PHX $1.28M @ 6.8% cap
Pros: nice long term absolute net lease. Good location. 2% annual bumps after year three.
Cons: small building size of 677 sf puts sale price psf at $1,890! Also puts rent at $128 psf annually! Yikes! Also only has operator guarantees.
PASS - Verizon NC - 9 years left on 11 year lease $1.74M 6.25% cap rate
Pros: 9 years left with 600 unit operator. Advertised as NNN lease. New construction 2013. Good highway frontage near Wal-mart. Close to the Western Carolina University, having more than 10,000 students.
Cons: high psf of $500. Negative population growth for area. Boonies of NC. Town of only 2,500 people (more in outskirts but still small). Away from main population base and highways especially for a 6.25% cap rate. Flat lease with only 5% bumps in options. $31 psf net rent which would be hard to replace.
PASS - Chase Bank Ohio $600k
Pros: long time operation at this location, 26 years, under $200 psf, ok cap for national bank at 6.75%, low $13 psf rent, Chase remodeled in 2015
Cons: 1988 construction, some landlord responsibility, only 4 years left on lease, negative population growth
Off to a good start! However, amazing how many NNN deals look great on the surface only to find out they have major flaws.