NNN is only referring to the structure of the leases. You can have multi-tenant properties that are basically set up as NNN with all expenses reimbursed by the tenants and get much better cap rates than your typical CVS/Walgreens selling at a 5% to 6% cap. These types of single tenants are basically for institutional investors or people paying all cash or a good bit of cash. The up side is they are usually 20 to 25 yr leases with decent increases every 5 years.
In the strip centers we own the units vary from 800 square feet to 2600 square feet. So a 10000 sq foot center should have about 5-7 units. I always thought the ideal unit would be 1200-1500 square feet. It seems to me these units rent more quickly than a 2500 square foot unit. However, if you are looking for national tenants, then I think the units should be sized 2500-5000 square feet. I hope this helps!
1. A reputable bank would lend with 25% occupancy before digging starts.
2. You can sell the project to investors once you get permits (after having completed the soft costs part - architecture, lega, permitting). Easier than just selling dirt with no approval.
find a good commercial broker who specializes in retail properties....
NNN is only referring to the structure of the leases. You can have multi-tenant properties that are basically set up as NNN with all expenses reimbursed by the tenants and get much better cap rates than your typical CVS/Walgreens selling at a 5% to 6% cap. These types of single tenants are basically for institutional investors or people paying all cash or a good bit of cash. The up side is they are usually 20 to 25 yr leases with decent increases every 5 years.
John,
Sounds like you did quite well.
This was always such a bizarre thread to me. Guy sounds clueless and all the sudden he owns a NNN property that has appreciated a billion percent.
Hunt around on google and the big commercial site. They will have pages full.
Also look at 1031 and TIC sites.
In the strip centers we own the units vary from 800 square feet to 2600 square feet. So a 10000 sq foot center should have about 5-7 units. I always thought the ideal unit would be 1200-1500 square feet. It seems to me these units rent more quickly than a 2500 square foot unit. However, if you are looking for national tenants, then I think the units should be sized 2500-5000 square feet. I hope this helps!
If possible design the units so you can combine them, e.g. two 1,500 sq ft would make one 3,000 sq ft for a larger tenant if necessary.
1. A reputable bank would lend with 25% occupancy before digging starts.
2. You can sell the project to investors once you get permits (after having completed the soft costs part - architecture, lega, permitting). Easier than just selling dirt with no approval.
Good luck!