How to find a tenant for triple net lease?

Question

I am new to real estate and I am looking to invest in a property that seems to be a good candidate for triple net lease. If I were to purchase the property how would I go about looking for tenants. For example major restaurants, Star bucks, banks, or fast food. How would I be able to contact them?

Account Closed · Answer

@Jonathan Anderson I'm from Corpus Christi as well. Where is the property? Have some pretty good knowledge and a few connections that might be helpful.

Jessica Zolotorofe · Answer

Definitely agree that a good broker is worth every penny. There are also avenues to contact some of the major tenants, like Starbucks, directly. They have an email address that you can send property info to and they will consider and contact you if they have any interest. Check some of the websites for the national tenants and see what their requirements are. Sometimes they'll give you a little break on those, but at least you can get an idea as to whether you are wasting your time or there's a chance they would take it. For regional/mom and pop tenants, you can advertise on loopnet if you have an account, or some of the other sites that brokers and potential tenants would take notice of, but again, my best advice is to leave the hard work to a broker. I wouldn't sign an exclusive if you can avoid it, but get a broker or 2 on board to find a tenant and offer a commission if they get a tenant in, lease signed, and rent payments commence.

Joel Owens · Answer

National tenants are picky on sites. Regional to mom and pop can move faster with decision making. They also tend to pay lower rents per sq ft but can also take B to C locations instead of the A's that national tenants usually will pay up for.

Key is what you are paying for the land and what size building you can put on it. If paying a premium for the land and you do not get the national tenants type rents you can lose money on the project.

Example you pay 1 million for a 1.5 acre parcel. If you get pharmacy on there or a Racetrac gas station then maybe profit pencils nicely. If you get a Popeyes only with a small building but wants a larger parking lot etc. then rents can be low. You do 2 tenants QSR STNL at 160k versus one building pharmacy at 250,000 rent.

No legal advice given.

Jonathan Anderson · Answer

@Jaysen Medhurst Okay sounds good thank you that was very helpful!

Jaysen Medhurst · Answer

@Jonathan Anderson, talk to a local commercial broker. First, get his opinion on whether your property is a good candidate for a big tenant. Second, ask him who has worked the majors in your market and can he help facilitate a meeting. Most of the big names either have 1 independent broker they work with in each region or have someone on staff who covers a certain region.

Not all NNN tenants are big-name, national brands. Many local / regional companies and restaurants also rent NNN properties. Don't close yourself off to those tenants. Of course, there's more risk the smaller the tenant.