Thursday, March 3, 2011
Chicago, Illinois - Today we received more Walgreen's Tenant information for our Net Lease Properties news. A commercial real estate transaction on a Net Leased Property with Walgreen’s Ground Lease took place St. John, Indiana. The net leased property is situated in St. John, Indiana which is approximately 33 Miles south of Chicago. This net leased property was purchased for $2,740,000 Million. This was a rare opportunity for a Walgreen’s ground lease located within the Chicago MSA (Chicago Metropolitan Statistical Area). This net leased property is located at 11101 US 231, in Saint John, with the zip code of 46373.
The seller of this net lease investment was a Chicago-based commercial real estate developer. This rare property, with a Walgreen’s ground lease has rent bumps. The ground lease has the land leased by Walgreen’s on a long term ground lease for 25 years. This ground lease with Walgreen's started in 2009. This is an attractive deal with an Investment grade tenant on a long term net lease. The net leased property sits in St. John which is ranked 48 out of the top 100 places to live, in the United States, on a recent CNN report.
The net lease property buyer was an institutional investor who is based in the Midwest. This net leased property buyer will benefit from rental escalation of 7.5% in less than twelve years. The net leased property investor can recognize the value of this investment, in the long term, because of the land value. Obviously another advantage for this attractive net leased property acquisition is Zero landlord responsibilities. This single tenant, net leased property leased to Walgreen's is situated on approximately 63,162 square feet of land.
The Walgreen’s net leased property, with a ground lease, is located at a signalized intersection of two US Routes (41 & 231). This net leased property location is on the heavily trafficked US Route 41 (Wicker Boulevard) which is a north-south roadway. Some Major retailers located in the St. John area consists of Target, K-Mart, and Strack & Van Til Supermarket. Strack and Van Til's has a vision to become one of the leading full service grocery food store.
There is a newer retail development in the area and that is a Tractor Supply Store. This retail development, with Tractor Supply Store is located 2 miles north of the Walgreen's net leased property. The US Route 231 (109th Street) is a road that travels east-west and connects going east to Crown Pointe, Indiana.
We see many Fast Food net lease properties with a Ground Lease. Many NNN Commercial Real Estate investors prefer the Absolute NNN Lease Investments. Many single tenant Net Lease Properties (STNL) with a Ground Leases are normally at a lower cap rate. The reason for the lower cap rate is that the tenant pays for all the improvements on the land with a ground lease.
However, with a ground lease, the landlord does not have the ability to depreciate the building, the net lease tenant receives the tax write-offs. The reason why NNN Commercial Real Estate investors prefer Absolute NNN lease investments is that the Tenant pays rent, property taxes, maintenance, and other expenses. The Net Lease Property Owner has zero landlord responsibilities, and he can still depreciate the property.
The advantages for a net lease tenant to enter into a ground lease, is that the Tenant's up front development costs are cut since the Tenant does not have to pay for the land. Also, the rent payments made under a ground lease should be deductible, for the tenant, for income tax purposes.
The Fee simple ownership is gives the NNN Investor ownership of the entire property, including both the land and buildings. The fee simple owner does have the right to possess, use the land and dispose of the land as they wish. The fee simple owner can sell the property, use it in a 1031 Exchange or have a net lease contract with a Credit Tenant, national tenant or local tenant.
Many of these Absolute NNN Ground Lease Investments listed below can be solid assets to build wealth over the long term.
•Arby's NNN Ground Lease
•Burger King NNN Ground Lease
•Carl Jr's NNN Ground Lease
•Checkers NNN Ground Lease
•Chick-Fil-A NNN Ground Lease
•Chipotle NNN Ground Lease
•Dunkin Donuts' & Baskin Robbins NNN Ground Lease
•El Pollo Loco NNN Ground Lease
•Jack in the Box NNN Ground Lease
•KFC NNN Ground Lease
•Long John Silvers NNN Ground Lease
•McDonald's NNN Ground Lease
•Panda Express NNN Ground Lease
•PDQ NNN Ground Lease
•Pizza Hut NNN Ground Lease
•Portillo's Hot Dogs NNN Ground Lease
•Rally's NNN Ground Lease
•Sonic Drive In NNN Ground Lease
•Starbucks NNN Ground Lease
•Steak N' Shake NNN Ground Lease
•Taco Bell NNN Ground Lease
•Tim Hortons NNN Ground Lease
•Wendy's NNN Ground Lease
•White Castle NNN Ground Lease
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