How to Purchase Two Different NNN Lease Properties

May 22, 2024

The Client

This particular client cold-called our team (at 314-997-5227) with an interest in investing in a NNN lease property. He knew to come to our team at Westwood because of our national presence as preeminent buyers’ advisors.

The Process

When we connected with this potential client, we reviewed his background and established both a) his budget and b) what he was looking for.

Within 60 days, our team of experts had identified two distinct NNN lease properties that aligned with his exact needs and specifications: a Walgreens (in his hometown) and a Sherwin Williams.

Our President/Principal, Chris Schellin, can count on one hand how many times he’s been able to source a NNN lease property in a client’s hometown. (This was a special added bonus for this client’s buying experience, to own property in a city that meant so much to him.)

The Result

Due to the current complexities of the NNN lease market and his personal cash reserves, our client chose to execute both of these particular transactions in cash.

Let’s review both properties our client purchased:

Before submitting an offer on the Walgreens property in Illinois, we discussed with our client Walgreens’ corporate financial outlook and recent downgrade from Moody’s as well as this particular Walgreens’ shorter lease term (10 years) and lower-than-average price ($3.2 million) and rent ($240k vs. the typically $400k+) with our client.

After in-depth discussions with our expert team of buyers’ advisors, our client was so comfortable onsite at this Walgreens that we went non-refundable on day one (barring title commitment issues).

We submitted an all-cash, non-refundable offer on this Walgreens. This aggressive approach was key for our client to secure a higher-than-average cap rate at 7.45%.

At any point in his 10-year lease period, should our client need to source a new tenant for the property, Westwood can personally help him to locate a leasing broker to fill the building through our extensive network.

For our client’s second NNN lease property, our team sourced a Sherwin Williams in Florida.

  • Key features to this deal included:
  • A short lease duration: 5 years
  • Rare, low price point: $760k
  • One of the best quality credit tenant sin our marketplace: Sherwin Williams
  • Versatile space that could be re-rented to a new tenant easily, if need be, and at a higher rent.
  • Simple, all-cash offer

Due to our standing in the NNN lease world and due to the proven nature of our buyer, who had just purchased a Walgreens, we out-competed multiple bids to win.

Why Work with Westwood?

The NNN lease market is a buyer’s market right now. Interest rates remain high, so cash is king. If you can buy with cash, buy with cash. You can seek better returns in NNN lease investing than you could elsewhere. When you purchase a NNN lease property you’re earning better returns than a 5% CD. You also can benefit from cost segregation and depreciation and get to enjoy cap rates that are higher than they’ve been since 2008-2010. Besides, if interest rates do eventually come down, you can refinance to replenish any cash reserves.

At this point in 2024, we’re advising our clients to expect no change in interest rates for 2024. Through NNN lease investing you gain options to shelter your income and see further tax benefits.

Here at Westwood we don’t push our product. We determine if you are or aren’t a fit for NNN lease investing. If we determine you’re not a good candidate for NNN investing right now, based on your assets and financial goals, we’ll never recommend you make a decision to buy that’s not in your best interests.

Contact us for a financial assessment of your financial goals and see if we’re a good fit for you! Give us our team a call at 314-997-5227.

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