NNN / Net Lease
Triple-net investments with stable, long-term cash flow. Corporate-guaranteed tenants and passive income.
Quick Answer
A NNN (triple net) lease requires the tenant to pay base rent plus property taxes, insurance, and maintenance. According to The Boulder Group, NNN properties traded at an average 6.3% cap rate nationally in 2024, making them one of the most popular passive commercial investment vehicles for retirees, 1031 exchange buyers, and income-focused investors. Barrett Henry, Broker Associate at REMAX Collective with 23+ years of real estate experience, represents NNN buyers and sellers across Hillsborough, Pinellas, Pasco, and Polk counties.
What Is a NNN Net Lease?
In a triple-net (NNN) lease, the tenant pays base rent plus all three operating expenses: property taxes, building insurance, and common area maintenance. The landlord collects rent with minimal management responsibility. It is as close to passive income as commercial real estate gets. Learn how NNN compares to other structures in the NNN lease explained guide.
NNN properties are popular among investors, retirees, and 1031 exchange buyers who want predictable cash flow without the headaches of active property management. The best NNN deals feature investment-grade tenants (think national pharmacy chains, quick-service restaurants, dollar stores) on long-term leases with built-in rent escalations. Use the cap rate calculator to model any deal before you make an offer.
Barrett Henry is a Broker Associate at REMAX Collective with 23+ years of real estate experience and specialized NNN expertise. Florida is one of the most active NNN markets in the country, driven by population growth, strong retail fundamentals, and deep investor demand. Barrett helps buyers source quality NNN assets and sellers position properties for maximum value through the investment sales and dispositions services.
Freestanding NNN retail properties with corporate tenants are among the most sought-after passive investments in Florida.
Key Considerations for NNN Investing
Tenant Credit
Investment-grade tenants (S&P rated) offer the lowest risk. Franchisee-operated locations may carry higher cap rates but more credit risk. Barrett helps you evaluate the difference.
Lease Term
Longer remaining lease terms command lower cap rates (higher prices). Properties with 5+ years left on a corporate lease are the most liquid. Short-term leases introduce renewal risk.
Rent Escalations
Built-in annual increases (flat or CPI-linked) protect against inflation. A 2% annual bump compounds significantly over a 15-year lease. Barrett models total return over your hold period.
Location Quality
Even with a strong tenant, location matters. A well-located property retains value and re-leases more easily if the tenant departs. Barrett evaluates both the tenant and the real estate.
Understanding cap rate fundamentals and how to value commercial property is essential before buying a NNN asset. Pair that with a full due diligence checklist to avoid costly surprises at closing. Compare NNN to multifamily or retail if you want active management upside.
Thorough lease review and cap rate analysis are critical steps in every NNN acquisition. Use the ROI calculator to stress-test your assumptions.
Interested in NNN Investments?
Tell Barrett your investment criteria — cap rate target, budget, tenant preference — and he will source matching opportunities.
How Do NNN Cap Rates Vary by Tenant Type?
| Tenant Type | Typical Cap Rate | Credit Profile |
|---|---|---|
| Investment-Grade Corporate | 4.5-5.5% | S&P rated (Walgreens, McDonald's) |
| National Franchisee | 5.5-6.5% | Strong multi-unit operators |
| Regional Brand | 6.5-7.5% | Established but not publicly traded |
| Local / Single-Unit | 7.5%+ | Higher risk, personal guarantee typical |
NNN properties are especially popular in Hillsborough County, Brevard County, and along high-traffic retail corridors in Pasco County. If you are evaluating NNN as part of a 1031 exchange, review the 1031 exchange basics guide first.
Barrett Henry is a Broker Associate at REMAX Collective with 23+ years of Florida CRE experience specializing in NNN investment sales.
NNN / Net Lease — Frequently Asked Questions
What does NNN mean in a lease?
NNN stands for triple net — the tenant pays base rent plus all three net expenses: property taxes, building insurance, and common area maintenance (CAM). The landlord collects rent with minimal management responsibility, making NNN the most passive form of commercial real estate ownership.
What is a good cap rate for NNN properties in Florida?
NNN cap rates in Florida range from 4.5% for investment-grade tenants on long-term leases to 7%+ for franchisee-operated locations or shorter lease terms. According to The Boulder Group, the national average NNN cap rate is approximately 6.3% as of 2024.
Are NNN properties good for 1031 exchanges?
Yes. NNN properties are one of the most popular replacement properties for 1031 exchanges because they offer stable, predictable cash flow and minimal management — ideal for investors looking to defer taxes while transitioning to passive ownership.
What tenants are common in NNN properties?
Common NNN tenants include national pharmacy chains (Walgreens, CVS), quick-service restaurants (McDonald's, Chick-fil-A), dollar stores (Dollar General, Dollar Tree), auto parts stores, convenience stores, and bank branches. Investment-grade tenants carry S&P credit ratings.
What risks come with NNN investing?
Key risks include tenant credit deterioration, lease expiration without renewal, single-tenant concentration, market-level rent changes, and property obsolescence. Barrett evaluates each risk factor and helps investors build portfolios with appropriate diversification.
How does a NNN property fit into a Florida CRE investment portfolio?
NNN properties serve as the stable, income-producing anchor of a diversified Florida CRE portfolio. Paired with a value-add multifamily or development play, a NNN asset provides predictable cash flow while the rest of the portfolio generates appreciation. Florida is an especially active NNN market due to strong population growth, limited state income tax, and deep 1031 exchange buyer demand across Tampa Bay, Orlando, and South Florida.
Sources
- The Boulder Group — Net Lease Research Report
- CoStar Group — Florida NNN Market Analytics
- National Association of REALTORS — Commercial Investment Trends
- IRS Publication 544 — 1031 Exchange Rules
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Last updated: July 2026