Net lease 101
The lease before the label.
A net lease is a real-property lease with a cost-sharing clause. The words on the offering are a starting point. The lease, the rent schedule, and the obligor are the file.
01
One tenant, one parcel
A single-tenant net lease is one tenant on one parcel with a lease that passes some operating costs to the tenant. The risk is that tenant, that lease, and that location. There is no diversified rent roll behind the check.
02
“Net” is a lease term, not a slogan
Triple net usually means the tenant pays base rent plus taxes, insurance, and maintenance. Double net passes fewer costs. Absolute net is the form where the tenant also takes roof, structure, and ordinarily parking. The label on a flyer is not the lease. Read the clause that says who pays what.
03
The card has four numbers that matter
Asking price, NOI, asking cap, and term remaining. The cap is NOI divided by price. If the offering leaves one of those out, the desk leaves it blank. A blank is not zero, and it does not satisfy a minimum.
04
An asking cap is not a closed sale
The asking cap is the seller’s math on the offering. A closed comp is a different file: a recorded sale with a date and a source. This desk does not blend the two, and it does not publish a median from another firm’s board.
05
The sign on the building is not the obligor
The tenant on the sign, the entity that signs the lease, and the guarantor can be three different parties. A franchisee, a master landlord, and the public parent are different credits. The desk names a guarantor only when the lease or a guarantee in the file names one.
06
Term is what is left, not what was signed
Look at years remaining, the options, and who can exercise them. An option the tenant can skip is not term. Then read the rent schedule: percent bumps, fixed-dollar bumps, or CPI, and how often. A flyer line is not the schedule.
07
1031 replacement is a clock and a file
A like-kind exchange can defer gain when a qualified intermediary holds the proceeds. Identification is 45 days from the sale closing. Completion is 180 days. Deferral is not forgiveness. Boot and mortgage relief can make gain taxable. A CPA and a qualified intermediary own the tax result.
08
Sale-leaseback is for the owner who stays
A sale-leaseback is when the owner holds the fee and the operating company becomes, or remains, the tenant. A property already leased to someone else is an investment sale. The lane name does not fill a blank price, cap, or NOI.
What to send the desk
- The lease and every amendment, including the commencement date and the rent schedule.
- Who signs, who guarantees, and any side letter that changes either one.
- Taxes, insurance, and the maintenance clause: who pays each.
- If this is a 1031, the identification deadline and the closing deadline you already have.
- Any figure you do not have can stay out. The desk does not fill it in.
This page is an explanation, not legal, tax, or investment advice. The lease controls. Confirm the form with counsel and the tax result with your CPA.