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Home > Real Estate Investing > Essential Real Estate

Essential Real Estate

SINGLE-TENANT FREESTANDING NET LEASED PROPERTIES

Single-tenant, freestanding, long-term net leased properties provide benefits across multiple real estate sectors, including retail, office and industrial. These holdings can eliminate both the occupancy risk associated with multi-tenant properties and the uncertainty of variable property expenses, and they provide investors with the potential for dependable long-term income.

SINGLE TENANT

Properties leased to financially strong single tenants generally eliminate the uncertainties associated with periodic vacancies, commonly seen in most multi-tenant properties, e.g., office buildings, industrial parks, and retail shopping centers. Owning a single tenant property leased to one investment grade tenant is similar in many respects to purchasing the corporate bond of that tenant. Both investments pay a current dividend and continue to do so as long as the credit is not severely impaired. Unlike a bond, however, which is usually the unsecured, general obligation of the company, real estate is a "hard" asset, often providing for periodic contractual rent increases, multiple uses, tax efficiency and potential for asset appreciation.

FREESTANDING

Freestanding properties are those properties which are physically unattached to another building and legally exist as a separate parcel. This is important as separate legal parcels are generally unaffected by zoning changes to nearby or adjacent properties. Freestanding properties are typically conveniently located at the corner of an intersection or strategically along a major highway, and provide easy access and high visibility from the main road. Tenants which are often located in freestanding locations include:

  • Pharmacies
  • Bank branches
  • Restaurants
  • Home improvement stores
  • Gas and convenience stores
  • Specialty stores

NET LEASE

Properties leased to tenants pursuant to a net lease structure provide for no landlord responsibility for property related expenses. The tenant pays all operating expenses, including, but not limited to, real estate taxes, utilities, insurance, repairs and capital improvements.

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