Types of Net Leases we Deal With

Here are 5 reasons why Ocean Block Capital might be the right choice of partner, to sell your Net-Lease property to.

Ocean Block Capital focuses on net-lease commercial properties for its investment. While our focus has historically consisted of retail, medical, and industrial net-lease, we are opening our focus to restaurants and QSR, and are considering a wider range of businesses on submission and valuation bases.

That said, there are 4 types of net-lease transactions that we consider working with, across all the above sectors.

1: Ground Lease: This type of net-lease acts as a specialized type of Triple Net-Lease, where the “ground” itself is owned by us, while giving lessees full freedom to build, modify, and change the physical structure of the building in which the lessee conducts their business. 

This works particularly well for most chain-businesses—retail, restaurant, gas station, medical office, and others of similar nature, as the structure of the buildings would be required to meet certain brand aesthetics and guidelines while catering effectively to the operations of the business, and might even need to be updated as the brand identity gets updated periodically.

2: Single Net Lease (N): Single net-leases offsets certain expenses that are contractually the lessee’s responsibility, by offering a lower monthly rental rate, which the tenant can take advantage of.

Additionally, it gives tenants a lot of transparency on the property tax that they pay, as the landlord may not be involved in it.

3: Double Net Lease (NN): Also may be referred to as net-net. In this type of net-lease, the landlord is typically responsible for structural maintenance expenses, and generally tends to work for businesses that are not dependent on the layout or aesthetic of the building structure from which the business operates. This works better for non-chain businesses who do not need to make structural adjustments to the building to operate, chain businesses that are not dependent on the physical structure of the building for their business operations and only need maintain an internal aesthetic, or holding companies who might sublease individual spaces within the larger building structure, giving those individual sub-lesses freedom to create their own spaces within the main, larger property.

Since some expenses are transferred to the lessee, the tenant benefits from a lower monthly rent.

4: Absolute Triple Net Lease (Absolute NNN): Absolute net-leases tend to be longer than other types of lease, and the rent tends to be lower. Any increases in rent would be decided and agreed upon in advance. 

This type of net-lease works to the advantage of the tenant given the predictable rent costs, and usually lower rent-increments as compared to the rental going-rate in the market.

National chain businesses are usually tenants of absolute net-leases, as they prefer to control the property long-term, predictable and low rent increases, and generally capitalize on prime locations. QSR and medical offices have been increasingly interested in this business.

If you’d like to submit your net-lease property for purchase consideration by Ocean Block Capital, you could submit your property details here.