- Where can I find a list of your properties available for sale?
A summary of the properties currently available for sale with information such as tenant, price, and location can be obtained by contacting an advisory professional. For a full property statement on any of our properties that are for sale, please contact us.
- How do I list my property with Robert Clark Retail Group?
Please call or email for a free property consultation and valuation analysis.
- Why do rates of return differ on investment properties?
The return on investment, often called capitalization rate (CAP Rate) is based on an all cash purchase and varies from one property to the next. Typically, an investment property with a national tenant on a long term lease that has rental increases will have a lower capitalization rate, thus a lower cash return to an investor. This is because of the security behind the lease, making it a safer investment. An investment with a lower level of risk will most often equate to a lower cash return. An investment with a higher level of risk most often will equate to a higher cash return. An investor must weigh the factors when evaluating risk versus yield.
- What are the landlord responsibilities in a triple net lease?
An investment property with a triple net lease has little to no landlord responsibilities. The structure of this lease is a major reason why the triple net lease is attractive to investors. For a complete description and explanation regarding the benefits of a triple net lease, please view the triple net lease on the Robert Clark Retail Group website.
- How does location affect the value of a triple net investment property?
Location is an important factor when evaluating this type of property. The value of a triple net investment property is directly related to the desirability of its location. The value of the location includes factors such as the following:
- Demographics
- Proximity to other national tenants
- Traffic counts
- Site visibility
- Traffic signals
- Hard corners
- Ingress and egress (accessibility into and exiting the property)
- Environmental considerations
- Once a purchase offer is submitted on a property, how is the offer evaluated?
Purchase offers are typically initiated when a Buyer signs a Letter of Intent (LOI) to purchase. After the Seller receives the purchase offer (LOI), an investor can expect a response from the Seller in the form of an acceptance or a counter offer to the LOI. Once the Buyer and Seller agree on the LOI, a Purchase Agreement is drawn, usually by the Seller/Sellers attorney, and delivered to the prospective Buyer within a few days from the acceptance of the LOI.
- Does the length of the lease term directly affect the value of a net leased investment property?
In most instances, yes. A longer lease term typically gives the investor more flexibility to re-sell the property at a later date. Additionally, lenders often will offer an investor with a long lease term more favorable terms for financing. Rental increases will provide the investor protection from inflation, as well as help sustain the value of the property.
- Who can I speak to about securing a mortgage to purchase a net leased investment property?
The Robert Clark Retail Group has direct relationships with lending sources as well as a select group of mortgage brokers. We will help to facilitate and obtain the most aggressive financing terms available for net leased real estate.
- What types of loans are available for a net leased investment property?
Certain investors will seek a 30 year amortization with a loan due date of 10 years. Typically, this will generate a greater cash flow than a fully amortized loan. However, conservative investors will opt for a fully amortized loan if the primary lease term with the investment property is for 20 years or longer. (i.e. a 20 year loan fully amortized loan will payoff the entire loan balance in 20 years). As lending is a dynamic process, loan quotes are subject to change.
- What cash down payment is required to purchase a net leased investment property?
Typically, 25% to 30% cash-down is common for a leveraged purchase transaction. However, investors that need some institutional financing can make a 50% cash-down payment. On average, a 50% cash down payment will generate a reasonable return on the cash invested after payment of debt service.
- Is it possible to finance a triple net lease property with a tenant that is a franchise operator?
Yes, however the loan requirements will typically reflect the inherit risk factors that come from having a franchise operator as the tenant. Additionally, the length and terms of the lease will influence the loan requirements.
- What needs to be considered when purchasing a net leased investment property out-of-state?
Location and demographics are important considerations when purchasing out-of-state property. Accessibility to the property should be considered as well as the proximity to other national tenants. Since building codes, regulations, and local city ordinances vary from state to state, it is important to have the purchase agreement and the property due diligence documents reviewed by an attorney who is familiar with the laws in the state where the property is located.
- Why invest out-of-state?
Triple net leased properties are one of the most sought-after types of real estate investment. The market is very competitive, and the correct timing of a purchase offer (LOI) is imperative for securing this type of investment property. By purchasing an out-of state property, an investor will normally have a greater likelihood of generating a higher cash return.
- Is a hard corner location an important factor when considering the purchase a single-tenant net-leased retail property?
Yes. Typically, a hard corner (most prominent corner location within an intersection) is the most desirable location for this type of investment property and will include the following characteristics:
- Controlled by traffic signals
- High visibility
- High traffic counts
- Easy accessibility
- Should properties with tenants using gas or oil be avoided when considering the purchase of a net leased retail property?
A property's environmental report (and associated documents) are almost always included with the due-diligence property documents. These reports describe in detail the environmental status of a property and the surrounding area. Though a certain amount of caution should be exercised when investing in a property whereby the tenant is using hazardous material, the risk is generally low. This is true especially for newer properties that meet current regulations and building codes. National companies, which use these materials, have strict standards for use and disposal, which mediates an investor's risk factor.
This pyramid can be thought of as an asset allocation tool that investors can use to diversify their portfolio investments according to the risk profile of each security. The pyramid, representing the investor's portfolio, has three distinct tiers:
