# Net Lease Investing 101: A Broker's Guide to Single Tenant NNN Properties
Single tenant net lease (STNL or NNN) properties are among the most actively traded commercial real estate asset classes. Their predictable cash flows, passive ownership structure, and creditworthy tenants make them attractive to a wide range of investors — from 1031 exchange buyers to institutional funds.
As a broker, understanding what makes NNN deals tick — and knowing how to present them effectively — is essential for winning listings and closing transactions.
## What Makes a Net Lease Property?
In a net lease structure, the tenant pays some or all of the property's operating expenses in addition to base rent. There are three common variations:
- **Single Net (N):** Tenant pays property taxes - **Double Net (NN):** Tenant pays property taxes and insurance - **Triple Net (NNN):** Tenant pays property taxes, insurance, and maintenance/CAM
True NNN leases are the gold standard for passive investors. The landlord collects rent with minimal management responsibility — no midnight maintenance calls, no CAM reconciliation disputes, no expense surprises.
## Key Metrics for NNN Marketing
When creating marketing materials for [net lease properties](/property-types/net-lease), these are the metrics that drive investor decisions:
### Cap Rate
The capitalization rate is the primary valuation tool. NNN cap rates vary based on:
- **Tenant credit quality** — Investment-grade tenants (S&P BBB- or better) command lower cap rates - **Lease term remaining** — Longer remaining lease = lower cap rate - **Location quality** — Primary markets vs. secondary/tertiary markets - **Rent escalation structure** — Fixed bumps, percentage increases, or CPI-linked adjustments
As of 2026, investment-grade NNN cap rates in primary markets typically range from 4.5% to 6.5%, while non-investment-grade tenants in secondary markets can trade at 7%+ cap rates.
### Lease Structure Details
Investors will scrutinize every clause. Your OM should clearly present:
- **Base rent** and rent per square foot - **Lease commencement and expiration dates** - **Renewal options** (number, term, and rent adjustment mechanism) - **Rent escalations** (fixed bumps, percentage, or CPI) - **Tenant responsibilities** (true NNN vs. modified gross) - **Landlord obligations** (roof/structure provisions, if any) - **Early termination provisions** or kick-out clauses - **Right of first refusal** or purchase options
### Tenant Credit Profile
For investment-grade tenants, include:
- **S&P/Moody's credit rating** - **Annual revenue** and number of locations - **Industry and headquarter location** - **Stock ticker** (for public companies) - **Years in operation** - **Store count trajectory** (growing, stable, or shrinking)
This information builds confidence that the tenant will honor the lease through its full term and beyond.
## Creating the Investment Package
A compelling NNN offering memorandum tells a story about predictable, growing income backed by a creditworthy tenant in a strong location. Here's how to structure it:
### Lead with the Investment Summary
Open with the key metrics on a single page: cap rate, NOI, price, lease term remaining, tenant name, and escalation structure. NNN investors are data-driven — give them the numbers immediately.
### Emphasize the Tenant
Dedicate an entire section to the tenant profile. For national credit tenants like Walgreens, Dollar General, or Starbucks, include corporate background, financial health indicators, and industry position.
### Location Context Matters
Even with a strong tenant, location quality affects pricing and exit strategy. Include:
- **Aerial map** with [surrounding retail and amenity overlays](/features/map-builder) - **Traffic counts** on adjacent roads - **Population and income demographics** within 1, 3, and 5-mile rings - **Nearby co-tenants** that validate the trade area
### Financial Projections
NNN cash flow projections are straightforward since expenses are tenant-responsible, but investors still want to see:
- **Annual rent schedule** through the primary term and options - **Cash-on-cash returns** at various leverage scenarios - **Reversion analysis** at estimated exit cap rates
CREBuilder's [financial calculator](/features/financial-calculator) handles NNN-specific fields including lease type, escalation modeling, and renewal option analysis.
## Common NNN Marketing Pitfalls
**Burying the lease term.** If there are only 4 years remaining on a 15-year lease, don't hide it on page 12. Experienced NNN investors will find it immediately, and hiding it erodes trust.
**Ignoring the real estate.** While the tenant drives value, the physical asset still matters. Include property condition details, age, recent capital improvements, and site plan.
**Overcomplicating the financials.** NNN deals are valued on simplicity. If your financial section has 30 expense line items, you're doing it wrong. Clearly show that expenses are tenant-responsible and focus on the rent schedule.
**Not addressing rollover risk.** If the lease expires in 5-7 years, proactively address what happens at expiration. Is the location strong enough for re-tenanting? What are market rents?
## Building Your NNN Practice
NNN transactions are often repeat business. Investors who buy one tend to buy many — building a 1031 exchange chain over years or decades. Consistently producing professional, data-rich marketing materials builds your reputation as a go-to NNN broker.
[Start creating professional NNN offering memorandums](/free-trial) with templates designed specifically for single tenant net lease properties — including tenant credit profiles, lease escalation schedules, and NNN-specific financial analysis.