Market Updates

NNN Demand on the Rises

The onset of the COVID-19 pandemic has sent waves of volatility through global economies and industries, and real estate is no exception

Gregory Gali

01 February, 2021 · 5 min read

Triple net lease properties prove a reliable investment despite market conditions.

The onset of the COVID-19 pandemic has sent waves of volatility through global economies and industries, and real estate is no exception. In an effort to minimize losses and find stable footing, many investors have been making the shift towards less uncertain asset classes, especially those that have historically remained robust in the face of economic turbulence. It should therefore come as no surprise to those familiar with triple net leases or NNNs, that there has been a sharp uptick in demand for these types of properties.

Despite downswings in other areas, the transaction volume in the NNN space keeps humming along as investors channel more funds into the national credit backed assets due to their security. In contrast to the hundreds of thousands of businesses nationwide that remain under threat of lockdown, NNN tenants retain the privilege of an essential categorization, and that reliability is a tremendous pull for capital investors. In the NNN multi-tenant retail space, while there was a considerable impact at the onset of the pandemic, the worst appears to have passed, with most of the effects absorbed by smaller tenants in strip centers.

If you’re an investor with capital to deploy, now is the time to look for deals. Rates are lower than ever – expected to range from the low 3s to the mid-4s depending on COVID-19’s impact – and despite a 65% to 70% LTV constraint on select national credit backed NNN tenants, and a reluctance to push leverage up, lenders are still eager to bank on reliable retail assets. Terrydale Capital has been keeping a close eye on opportunities for existing and potential clients, and are fully prepared to help you take advantage of the current shift in the market. Reach out to any of our team members to find out exactly what we can do for you. 

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