How to Find a Tenant for a Triple Net Lease

According to The Motley Fool, “A triple net lease (or ‘NNN’ lease) is a form of real estate lease agreement where the tenant or lessee is responsible for the ongoing expenses of the property.”

Unlike the single lease, on which the tenant pays one additional expense in addition to rent, and double lease, on which the tenant pays property taxes and insurance premiums in addition to rent, the triple net lease requires the tenant to pay rent and utilities, plus three additional expenses.

These expenses are:

Real estate taxes
Building insurance
Maintenance

Advantages of Triple Net Leases

A triple net lease can be very challenging, but unlike the other types of leases, this form offers a lower rent rate because the tenant is already responsible for paying the aforementioned three expenses. This lower-than-market rent is a big advantage in finding a tenant for your property.

The tenant also has more control on the property they’re renting. For example, if something is broken in the unit, the tenant can directly hire someone to fix it rather than waiting for the landlord to find someone to fix it. This is very attractive, as it signals feelings of ownership, and is also good for people who have short patience.

Where to Find Triple Net Lease Tenants

Most national tenants have a real estate division. If you go to their corporate site and search for “real estate division,” you will find the correct contact person. If you wish, you could even go to a commercial broker like CBRE, JLL, Colliers, and more to find the landlord representative.

The broker only gets paid if they find a tenant. The fee can be anywhere from 3 to 6 percent of the lease value.

Let’s say your broker finds you a tenant who signs a 10-year lease, paying $50K per year. That is $500K. So at 3 percent, you would need to pay the broker $15K.

I would recommend paying the broker a percentage at lease signing and a percentage when the tenant moves in.

And of course, you could always try to rent the space out yourself. But I would say after 30 to 60 days, if there’s been no movement, sit down with a broker.

Time is money!

What other methods have you used or heard about with regard to finding tenants for triple net leases?

Comment below.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.