There are many factors to consider in buying a Triple Net property.
Perhaps the most important is:
Strength of Tenant
Because if the tenant cannot pay the rent for any reason, there will likely be an interruption in the investor’s cash flow. Is the tenants product or service likely to remain relevant? Starbucks has become a fixture in our society and appears to be in no danger of vanishing. Is the tenant financially stable?
Starbucks (SBUX) is the tenant, and they enjoy a credit rating of A-.
Is it growing or in decline?
This is a new building in a growing community.
How long does it have to run?
Does it have escalation clauses to protect against inflation?
Can the populace afford to buy the product or service?
The Building itself
While the tenant is responsible for most if not all upkeep on the building, the investor must ascertain that the building will remain structurally sound for years to come. This is a new building built to meet the LEEDs energy requirements, so it should have a useful life far beyond the life of the lease.
This property meets all of these criteria and should be a truly trouble free investment for many years to come.
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