NNN Lease Option Periods
About 11 years ago I purchased a NNN Ground Lease with a couple of friends.
6% CAP | Corp Backed National Tenant | 10% rent bumps every 5 years | High Income Zip Code
It had a fresh 15 year NNN lease in place when we purchased it and it also has three 5 year option periods for a total of 30 years.
We knew this when we purchased the property but the current rent is low. Even after two 10% rent bumps they are paying about 64% their national average per store for rent. This store is in a great location and it does very well for them.
In 4 years our initial term with them will be over. I'm assuming they will exercise their option periods and there is nothing we can do about it but I wanted to see if anyone had any ideas. Do NNN tenants ever renegotiate leases after their initial term is up? For example, if they wanted to remodel the property I could see them wanting to have a longer agreement in place. That's a long shot but I wanted to ask. @Joel Owens you seem like the NNN expert here. Any advice? THANKS!
6% CAP | Corp Backed National Tenant | 10% rent bumps every 5 years | High Income Zip Code
It had a fresh 15 year NNN lease in place when we purchased it and it also has three 5 year option periods for a total of 30 years.
We knew this when we purchased the property but the current rent is low. Even after two 10% rent bumps they are paying about 64% their national average per store for rent. This store is in a great location and it does very well for them.
In 4 years our initial term with them will be over. I'm assuming they will exercise their option periods and there is nothing we can do about it but I wanted to see if anyone had any ideas. Do NNN tenants ever renegotiate leases after their initial term is up? For example, if they wanted to remodel the property I could see them wanting to have a longer agreement in place. That's a long shot but I wanted to ask. @Joel Owens you seem like the NNN expert here. Any advice? THANKS!