Triple Net (NNN) Leases with NNNeil Wahlgren

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5 • 831 Ratings

🗓️ 12 November 2021

⏱️ 39 minutes

🔗️ Recording | iTunes | RSS

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Summary

Mike Taravella discusses the importance of understanding your rent roll as a buyer and an owner. Key Information: What is a Triple Net Lease (NNN) and what does it include? Where is the operational risk? With the tenant! Who pays the expenses? Probably the tenant! Industrial NNN Leases 10-20 year leases Some of these tenants have been there for 30-70 years! Customized the building to their needs Typically no property management needed – 2 year inspections (as needed) Multi-tenant NNN Imagine your NNN as a bond. What is the ability of the tenant to pay their bills? Is cooperate backing the lease? The strength of your lease is the reliability of the cashflows Get quarterly reports and verify the “rosiness” of the picture. Always audit the financials and be aggressive with it! Renewal Risk Sale leaseback – Buy from the owner-operator and then lease it back for 20 years Short timeframes left on the lease are more of the “value add” purchase Debt on NNN CMBS Nonrecourse debt Big prepayment penalties Recourse debt Regional Banks More flexible Better terms Schools, traffic count, etc. doesn’t matter! And the dirtier the better! Find an investment group that does your new asset class already. Most people are willing to help each other! Contact: www.magcp.com Email: [email protected] To register to invest with us: https://jandg.activehosted.com/f/58 Rand CRE’s Facebook: https://www.facebook.com/randcre Rand CRE’s Linkedin: https://www.linkedin.com/company/randcre Rand CRE’s Instagram: https://www.instagram.com/randcre

Transcript

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0:00.0	Welcome to the RANCRE show, commercial real estate with no stone left unturned.
0:09.7	Hey, everyone. Welcome to the RANCRE show. I'm your host Mike Tarvella. And today, I have the honor and privilege speaking with Neil Walgren. He is in charge of MAG Capital Partners. He himself has raised
0:22.8	over $450 million. Has led a group in the Bay Area have an assets under management over $500
0:29.6	million. And our MAG Capital Partners considers investments between $5 million and $100 million
0:36.9	focusing on industrial net lease,
0:39.1	sales leaseback, and commercial developments. Most importantly, he is a veteran in the Air Force
0:44.6	and Navy. So thank you for your service. And welcome to the show. Neil, how's it going?
0:48.6	That's great. Thanks for having me on, Mike. Yeah, absolutely. So one thing that we haven't had
0:54.0	Rand Siri show first is
0:56.2	triple net leases. We've kind of talked about them, like very high level. You hear the mailbox
1:01.3	money, but we'll love to have a professional like yourself kind of go, give some little more
1:05.9	color, a little more light on the process on the investing side and what you seem to be the pros with triple
1:12.6	net versus rule say multifamily and have the great debate. I like it. Yeah. So, you know,
1:18.8	really triple net. You're going to see a triple net lease structure in certain asset types more than
1:25.1	others, right? So, I mean, let's take, you know, a very
1:29.4	common entry point commercial real estate class is multifamily. On those, you're never going to see
1:34.9	a triple net lease, right? You can never expect, you know, a resident for 10 years in the one spot.
1:40.5	Come on. Exactly, right? Yeah. So those are typically gross or modified gross leases where the landlord is paying all or the majority
1:50.5	of taxes, of insurance, of utilities.
1:53.4	Sometimes they'll back bill the tenant for some parts of those.
1:56.2	But, you know, let's start with a, you know, kind of textbook definition.
2:00.4	So a triple net lease, otherwise known as a NNN lease, those three ends are going to refer to
	...

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