Triple net (NNN) leases are one of the most attractive structures in commercial real estate for passive investors. Under an NNN lease, the tenant — rather than the landlord — is responsible for property taxes, insurance, and maintenance. The landlord receives a predictable net income stream with minimal ongoing obligations.
This structure is especially common in retail properties occupied by national credit tenants: pharmacies, fast food chains, auto parts stores, dollar stores, and similar businesses. These tenants sign long-term leases (often 10–20 years) and have strong balance sheets, making their lease obligations highly reliable.
Evaluating an NNN Investment
The key variables in any NNN deal are the tenant’s credit quality, remaining lease term, rent escalation schedule, and property location. A 15-year lease with a 1.5% annual rent bump signed by an investment-grade retailer in a dense suburban market is a very different investment than a short-term lease with a regional tenant in a lower-traffic location.
At RIYT, our commercial team focuses on NNN properties with creditworthy tenants, meaningful remaining lease terms, and locations with strong traffic counts and demographics. We seek deals where the going-in yield reflects the risk profile appropriately — and where the downside, should a tenant exit, still produces an acceptable outcome given the real estate fundamentals.