💹NNN Market Demand

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Welcome to Hughes CRE Insider, your FREE go-to source for the latest insights, trends, and updates in the world of Triple Net (NNN) commercial investment properties. Whether you're a seasoned commercial real estate broker or an owner/investor looking to dive into the world of NNN properties, our newsletter is tailored to provide you with valuable knowledge and resources to enhance your expertise and success in this lucrative sector.

Featured Article

Market Demand: Identifying Areas with High Demand for NNN Properties

In the ever-changing world of commercial real estate, it's crucial for brokers and investors to know what people want. Lately, Triple Net (NNN) properties have been really popular. These properties have lots of benefits, like less work for the landlord and steady income. So, finding places where people really want NNN properties can be a big opportunity for brokers and investors.

Understanding the Appeal of NNN Properties

To understand why NNN properties are popular among investors, it's important to know that NNN leases require tenants to pay for property expenses like taxes, insurance, and maintenance, in addition to rent. This means that tenants take on most of the responsibilities related to the property, making NNN investments attractive for those looking for passive income. NNN leases often involve well-known tenants with good credit, like national retail chains, pharmacies, and fast-food restaurants. These tenants provide stability and reliability in rental income, making NNN properties a good option for cautious investors seeking long-term, low-maintenance investments.

Identifying Areas of High Demand

1. Economic Growth Centers: Areas experiencing robust economic growth tend to attract businesses seeking expansion opportunities. Look for regions with thriving industries, growing populations, and increasing job opportunities. Such areas often exhibit high demand for commercial properties, including NNN assets.

2. Demographic Trends: Analyze demographic data to identify areas with desirable population characteristics for retailers and service providers. High population density, favorable income levels, and strong consumer spending habits are indicators of areas likely to have high demand for retail and commercial space.

3. Retail Corridors and Transit Hubs: Retail corridors and areas near transit hubs are prime locations for NNN properties. These areas benefit from high foot traffic and visibility, making them attractive to retailers and investors alike. Analyze transportation infrastructure plans and retail development trends to identify emerging hotspots.

4. Stable Real Estate Markets: Seek out markets with historically stable real estate performance. While rapid appreciation can be enticing, markets with consistent growth and limited volatility often provide more reliable long-term investment opportunities for NNN properties.

5. Tenant Preferences: Consider the preferences of NNN tenants when evaluating market demand. Certain industries, such as pharmacies, dollar stores, and convenience stores, have demonstrated consistent demand for NNN leases. Research industry expansion plans and target markets to align investment opportunities with tenant demand.

Utilizing Data and Analytics

In today's digital age, leveraging data and analytics tools can provide invaluable insights into market demand for NNN properties. Utilize platforms that offer comprehensive market data, demographic information, and predictive analytics to identify emerging trends and opportunities accurately.

Additionally, networking with industry peers, attending real estate conferences, and staying informed about legislative changes impacting commercial real estate can further enhance your ability to identify areas with high demand for NNN properties.

Conclusion

To succeed in the commercial real estate market, it's important for brokers and investors to stay updated on the latest trends and find areas with high demand for NNN properties. By analyzing market dynamics and using data-driven insights, you can discover profitable opportunities in thriving markets. Remember, timing and location are key factors for success in this sector. By strategically positioning yourself in areas with high demand for NNN properties, you can maximize your investment potential and achieve long-term success.

NNN Property Spotlight

ABSOLUTE NNN DOLLAR GENERAL FOR SALE

6.25% Cap Rate | NOI $147,950/Annually

New Construction Dollar General - Federalsburg MD

523 South Main St
Federalsburg, MD 21632

Rent Commencement: January 2024
Cap Rate: 6.25% | NOI $147,950/Annually
Original Term: 15 Years
Options: Five (5) – Five (5) year optional terms / 10% increase in each optional year
Lease Type: NNN
Building/Lot Size: 10,640 Sq. Ft./ 1.60 +/- acres.

Contact Today for Offering Memorandum

Industry News Roundup

Stay up to date with the latest news and developments in the triple net (NNN) industry with our curated roundup of headlines from around the web.

-Yesway expands in Oklahoma, opens new concept store in Texas (Read More)

-Chick-fil-A opens its first-ever mobile pickup-only restaurant (Read More)

-Dollar Tree, Family Dollar to Close 1,000 Stores (Read More)

-How One Net Lease Giant Plans to Deal With Debt Maturities (Read More)

-Starbucks names first-ever CEO, North America; adds new global roles (Read More)

NNN Tenant Profile

Tenant Description

Bank of America, (NYSE: BAC) is an American multinational banking and financial services corporation headquartered in Charlotte, North Carolina.

Bank of America did not emerge unscathed from the banking crisis and great recession but the strength of its deposits and dominance in market share along with its highly visible locations in both urban and suburban settings have helped Bank of America hold the interest of net lease investors. Generally, Bank of America sites are on 1.00 acre plots with improvements of 4,000 to 6,000 square feet and are sold as unsubordinated ground leases* to net lease investors.

*In a ground lease, the investor/landlord owns the ground and the tenant constructs the building at costs of around $1.3mm and retains ownership of the building until lease termination. The tenant leases the ground from the investor/landlord and on the tenant's default or other termination of the lease; the building becomes the property of the investor/landlord. Ground leases are extremely passive investments and generally sell at 50 to 125 basis points below the average cap rate for NNN "fee simple" ownership of ground and structure transactions leased by the same tenant.

The Bank of America ground lease is attractive to investors because they typically have an initial term of 15 to 20 years with up to five (5), five (5) year renewal options. In addition, the Bank of America ground lease provides rent increases of 10-12% every five (5) years.

Bank of America Corporation is the second-largest bank in the US by assets, holding $2.35 trillion. Bank of America has a relationship with 99% of the US. Fortune 500 companies and 83% of the Fortune Global 500. The company is a member of the Federal Deposit Insurance Corporation (FDIC) and a component of both the S&P 500 Index and the Dow Jones Industrial Average.

Bank of America has operations in 35 countries. It provides services ranging from investment and corporate banking to investing and equity execution services. In the United States, Bank of America serves approximately 66 million customers and small businesses with 4,300 retail banking offices and approximately 16,300 ATMs. Bank of America's online banking serves 36 million active users, including over 26 million mobile app users.

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