NNN ground lease - 1st real restate investment

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I am looking to invest in commercial real estate for the first time. I found a 25 year ground lease for a Taco Bell and Starbucks. It is a 5% cap for Taco Bell and 5.75% for Starbucks. What are tax incentives on a ground lease since there is no depreciation? Just loan interest? I like the idea of collecting lease payments for 5 years, then when I get the 10% rent increase after 5 years, 1031 the property for a bigger NNN deal. I have considered an apartment complex investment, but really don't want the work that comes with the extra 3-5% cap. Thoughts and suggestions?

[Kyle J.]

Originally posted by @George Wendt:

I believe you can only 1031 your land into other land.  That is one of the downsides of this kind of transaction.

That's incorrect.  What's allowed in a 1031 "like kind" exchange is actually pretty broad.  It could be raw land for an apartment complex, or an apartment complex for a strip mall (or any number of other possibilities).  It doesn't have to be exactly the same type of property.

Justin, as to your questions about NNN leases, @Joel Owens is one of the resident experts on those and probably better suited to respond. This is right up his alley.