Earlier this year, a high-net-worth client came to Westwood with proceeds from a 1031 exchange of about $7 million and a clear goal: replace his income with a property he would not have to manage. He also served as the executor of a family estate, so the decision would have a ripple effect that extended beyond his own portfolio. Mike Kocur, one of our expert advisors on the Westwood team, guided our client through the 1031 process and helped him close on a Heartland Dental property in Gretna, Nebraska, a high-growth suburb of
Omaha, for $2 million at a 5.8% cap rate, all cash.
About the Heartland Dental Property in Gretna, Nebraska
The property sits on an outparcel to a Hy-Vee grocery store. Residential subdivisions and apartment buildings surround the site, and the tenant provides an essential medical service that patients need regardless of the strength of the broader economy: dental care.
The City of Gretna, a suburb of the Omaha metropolitan area, has recently experienced remarkable growth. The city’s population rose from 5,083 at the 2020 Census to an estimated 9,054 in 2023 per U.S. Census Bureau estimates, a jump of almost 80% in three years. For a service tenant like a dental office, more residents nearby means a larger base of future patients.
“For this client, Heartland Dental appealed as a recession-resistant medical tenant in a strong location. You have residential subdivisions and apartment buildings right around it, and the population there continues to grow.” Mike Kocur, Vice President and
Principal, Westwood Net Lease Advisors
Is Heartland Dental a Good NNN Tenant in 2026?
Heartland Dental is the largest dental support organization (DSO) in the U.S., with more than 1,900 practices across its network. In May 2026, S&P Global Ratings upgraded Heartland Dental from B- to B after the company grew revenue 7.3% in 2025, and S&P expects high single-digit revenue growth in each of the next two years.
Dental care also holds steady, even when the larger economy slows. People still need cleanings and repairs regardless of market headlines, which gives a dental tenant a steady base of demand. To see how a tenant’s rating fits into the broader picture of lease strength, our guide to NNN tenant credit ratings explains what each tier means for buyers.
Heartland Dental Sale Price, Cap Rate, and Interest Rate
- Purchase Price: $2,000,000
- Cap Rate: 5.80%
- Annual NOI: About $116,000 (implied by price and cap rate)
- Structure: 100% cash, funded with 1031 exchange proceeds and inherited funds
- Location: Outparcel to Hy-Vee in Gretna, Nebraska (Omaha metro)
- Interest Rate: No loan. The federal funds target range stood at 3.75% to 4.00% after the Federal Reserve’s September 16, 2026 rate increase.
Because our client paid cash, the full 5.8% return flows to him with no debt service to offset it. Commercial loan rates sit above the Fed’s benchmark, since lenders add a spread on top of Treasury yields. When a loan costs more than a property’s cap rate, each borrowed dollar pulls the return down, a condition known as negative leverage. At 5.8%, this deal would have been a tough fit for a buyer with a loan. For an all-cash buyer, it made sense.
Why All-Cash Buyers Have an Edge in the 2026-2027 NNN Market
Buyers today want deals that will still produce a return as rates rise. After three rate cuts in 2025 (see what the December 2025 Fed rate cut meant for NNN investors), the Fed reversed course in September 2026 and increased rates to 3.75%-4.00%, with another rate increase expected before year-end 2026. Higher rates shrink what financed buyers can afford, and that gives all-cash buyers a clear edge in the NNN market.
Cap rates tend to trail interest rates. Mike and the Westwood team expect a lag of six to 12 months before cap rates adjust to shifts in the cost of debt. That gap creates an opportunity: a cash buyer can secure an elevated cap rate today and benefit if cap rates compress later.
“Cash buyers can lock in an elevated cap rate now. If cap rates compress later, that upside is already built into the deal.” Mike Kocur, Vice President and Principal, Westwood Net Lease Advisors
How a 1031 Exchange Helped Our Client Replace Income
Our client brought real investment experience to the table, yet a 1031 exchange of this size was new territory for him. Mike walked him through the 1031 rules and the specifics of NNN underwriting so he understood each step before he committed.
A 1031 timeline leaves little room for error, and the best properties often sell before they reach the open market. For buyers who find the right property before their current one sells, a reverse 1031 exchange offers another path to a tax-deferred close.
Why Heirs Choose Passive NNN Properties in the Great Wealth Transfer
This deal reflects a trend we here at Westwood are seeing more frequently. The Great Wealth Transfer is expected to move $84 trillion from Baby Boomers to younger generations. This generational (really, once-in-a-lifetime) transition will place large real estate holdings into the hands of heirs who may lack the time or expertise to run it.
“We see more heirs inherit real estate they don’t have the time or the expertise to manage. They want to preserve that cash flow, and a triple net property lets them do it without the day-to-day obligations.” Mike Kocur, Vice President and Principal, Westwood Net Lease Advisors
In a NNN lease, the tenant pays property taxes, insurance, and maintenance, which keeps the owner’s role light. Owners of apartments and other hands-on assets face higher tax and insurance bills, along with capital costs, that eat into returns. Many now sell and move that equity into NNN assets. Our comparison of single-tenant and multi-tenant properties breaks down how those two paths differ.
Some parents act before an estate passes and convert active assets into passive ones, so their heirs inherit something simpler to hold.
Why This Heartland Dental Deal Worked
This deal worked for two key reasons:
- Our all-cash buyer could accept a cap rate that a buyer financing their purchase with a loan would find hard to justify
This particular Heartland Dental property itself presents a compelling argument: lasting income from a recession-resistant medical tenant in a high-growth suburb. - This is the Westwood Difference. When you work with a buyer’s advisor to execute the search and purchase of a NNN lease property, you can trust that our team will find and deliver the best possible results for you and your investment priorities. Mike’s guidance on 1031 mechanics and NNN underwriting helped our client protect the cash flow he was responsible for as estate executor.
For investors who plan to add more properties over time, a diversified NNN lease portfolio spreads that income across tenants and markets. With the Fed back in a rate-increase cycle, the window for cash buyers to secure today’s cap rates may not stay open for long. Contact our team today or call 314-997-5227 to learn how Westwood can help you place 1031 proceeds or inherited assets into a passive NNN property.
