Sample NNN Properties
McDonald’s, Panera, Chipotle,
Taco Bell, KFC, etc.
Walgreens, CVS, Rite Aid, etc.
Chase Bank, Wells Fargo, PNC,
Bank of America, etc.
AutoZone, O'Reilly Auto Parts
Advance Auto Parts, etc.
Dollar General, Family Dollar,
Dollar Tree, etc.
Walmart, Home Depot, Lowe's, Target, Kohl’s, Kroger, etc.
Sample Properties Include:
- Walgreens in Florida for $9,532,418
- CVS in New York for $9,400,399
- Chase Bank in Georgia for $3,998,297
- Wells Fargo in California for $5,312,513
- Bank of America in Illinois for $4,486,890
- Advance Auto Parts in Indiana for $1,157,328
- Auto Zone in Michigan for $2,797,921
- McDonald's in Virginia for $2,285,840
- Chase Bank in North Carolina for $4,953,130
- Starbucks in Texas for $1,255,790
- Taco Bell in Massachusetts for $1,699,430
- Chili's in Missouri for $1,297,550
- Dollar General in Washington for $1,212,790
- Walgreens in New Jersey for $14,682,753
- Chase Bank in Pennsylvania for $4,543,310
- Wells Fargo in Colorado for $5,510,230
- Bank of America in Tennessee for $4,225,965
- Advance Auto Parts in Wisconsin for $1,851,879
- McDonald's in Ohio for $2,562,740
- CVS in Minnesota for $8,641,237
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Location matters when you purchase a NNN property. Strong demographics and a prominent parcel are the keys to long-term success. The property should have more than enough nearby residents who need the product or service that your tenant provides. The property should have strong visibility from the main road and easy access for clients to enter and leave. In addition, a location close to many other tenants has the advantage of being a destination for shoppers. For example, a strong retail property would be located on a prominent street with surrounding tenants such as Chase Bank, Wells Fargo, Walgreens, CVS, Wal-Mart, Home Depot, Lowe’s, McDonald’s, Chipotle, O’Reilly, AutoZone, 7-Eleven, etc.
Strong Guarantee & Prominent Location
Property owners sleep well at night when their tenant is financially strong. This is why a strong tenant is often the first item on an investor’s criteria list. Fortunately, many NNN properties are leased by companies that are considered “Investment Grade” by Standard & Poors. These companies often have a multi-billion-dollar market capitalization. Examples include Walgreens, CVS, Starbucks, McDonald’s, Chipotle, Chase Bank, Wells Fargo, AutoZone, Home Depot, Dollar General, Target, and other brand name retail tenants. (Market capitalization is the value of a publicly traded company. Value equals the total shares times the current market price of each share.)
Is it possible that one of these investment grade tenants will become bankrupt and therefore not be able to fulfill the lease obligations? Yes. Is it likely? No.
Having a strong tenant is certainly important. However, a prominent location should be an investor’s most important criterion. Here’s why: Over time, a property with a prominent location and average tenant will trump a property with an average location and a great tenant. Fortunately, NNN properties are usually located in prominent locations.
Have you ever seen a Walgreens, McDonald’s or Chase Bank in a location that you would not be proud to own? Have you ever seen a vacant CVS, AutoZone or McDonald’s? The answer to these questions is probably “no”.