What Is A Triple-Net-Lease?

A triple-net-lease is a lease in which the tenant is responsible for paying the three major expenses associated with commercial real estate ownership:

• (i) property tax
• (ii) insurance
• (iii) maintenance (including major replacement items of a capital nature such as roof, asphalt, HVAC, etc.)

3NP stands for “Triple Net Properties”

Why Triple-Net-Leases?

• Leases are typically long term to a qualified tenant.
• Triple net leases are less management intensive vis-à-vis other types of leases, thus requiring lower overhead.
• Triple net leases typically provide very stable cash flows with rent escalators.

Why Focus On Single Tenant, Triple-Net-Leased Properties?

• Proven growing US Market
• Hugely under serviced Canadian market – both from a capital and a customized solutions perspective
• More consistent risk-adjusted returns because of:
  • (i) longer lease terms
  • (ii) lower TIs and related costs
  • (iii) lower vacancy rates
• Tenants are tethered to their specific locations for specific reasons including:
  • (i) traffic patterns
  • (ii) workforce
  • (iii) replacement costs to move
  • (iv) zoning

Value Creation Opportunities

• A granular, site-by-site approach to optimize each individual single-tenant location will uncover previously unrecognized sources of present and future value.
• Active portfolio management creates further revenue and capital enhancement opportunities.
• More attractive, flexible financing options given deep banking relationships.