Negotiating lease terms for NNN commercial build-to-suit

[Scott Morris]

As an investor I am currently negotiating a buil-to-suit NNN lease that I am building from the ground up and will have a lesser known national fast food franchise as the tenant. I will be getting a 20 year lease but I would like some opinions on determining what the base rent, possible percent rent, rent escalators, etc could be? I will be negotiating with the franchisee and not the franchise itself.

Regarding the base rent, if the project (land and construction) is valued $1.5M should I use the CAP=NOI/value to determine the rent? Let's say we agree on a 10 cap rate and the NOI is basically what the rent would be since there would be very little to no expenses (except for attorney/accounting fees) then that would make the annual rent $150,000. Or do I just calculate the rent according to the square footage for this type service in the area? Any other options?

As for a percent lease,  what different formulas have been used regarding what percent over a certain breakpoint on gross vs. net income of the business?

Rent escalators? For commercial properties, what are some are the norms for rent increases, 1% a year, 3% every two years, 5% increase after 5 years?

Please feel free to add any comments regarding your experience with negotiating lease terms.