Sale and leaseback syndication

[Evan Loader]

I've been invested in an array of multifamily and MHP private syndications as an LP for 2 years now, a convenient way to invest in real estate passively while I work overseas, leveraging the experience of a reputable sponsor/s. But I am now looking into single tenant sale and leaseback syndication NNN deals as an LP. I like the upside of regular cash flow, substantially lower expenses for upkeep/maintenance/property taxes, and long term triple net leases.

I realize the downside is you are at risk of a single tenant, but am intrigued by the opportunity to balance where my syndication capital is going. I am balanced about 50/50 between Wall Street products and private RE syndicated deals as an LP.

What have your experiences been so far in NNN sale and leaseback deals? Industrial/retail/office, any comments would be appreciated for insight.

[Taylor L.]

Personally I would look to storage and mobile home parks first, primarily due to the single tenant question. I see single tenant sale leasebacks as the corporate bond of the real estate world. You're basically clipping a coupon for the life of the investment, but if the company goes under you're in for rough times. Whereas in storage and MHPs you have numerous tenants and can still force value add.