Cap Rate NNN question

[Derek Shearin]

I happened to find a property that the owners are offering a 20 year NNN Leaseback "Sale". They list the Cap Rate at 7.88%. On an apartment building, I understand that Cap Rates are calculated based on Net Operating Income...(Gross income minus Operating expenses). For a NNN property, what would be the "operating expense"? Is it just management fees?

Mostly just curious.

Derek

[Joel Owens]

Some of the posts here are lumping in how single tenant net lease properties might operate and how a RETAIL CENTER tenant might operate.

Night and day difference between those 2 things.

For single tenant you can have absolute NNN where tenant does everything. Then you can have some from of NN which on the more passive side is just roof with a warranty to the whole kitchen sink ( roof, structure, parking lot, utility lines, etc. )

Tons of variables. If you are buying get a good commercial retail broker or at the least a commercial retail attorney.