Exit strategies in NNN

[Michael Behrens]

Two part question. With uncertainty around interest rates, market forces beyond our control and an ever changing retail landscape, what is the best advice on formulating an exit strategy for NNN investments today given a long lease and long time horizon?

On the flip side, what's the best exit strategy for NNN investors who have 5-7 years left on the primary lease, are uncertain if the tenant will exercise the renewal option and the tenant doesn't report rent to sales?

Dollar General stores, as far as I know, don’t report rent to sales today.

[Greg Dickerson]

Originally posted by @Michael Behrens:

Two part question. With uncertainty around interest rates, market forces beyond our control and an ever changing retail landscape, what is the best advice on formulating an exit strategy for NNN investments today given a long lease and long time horizon?

On the flip side, what's the best exit strategy for NNN investors who have 5-7 years left on the primary lease, are uncertain if the tenant will exercise the renewal option and the tenant doesn't report rent to sales?

Dollar General stores, as far as I know, don’t report rent to sales today.

The only way to exit is thorough a sale. Otherwise it'a refi hold situation. Right now is the time to sell if that's your goal. We are definitely at the peak and CAP rates are at all time lows for pretty much every tour of real estate. It's also a great time to refi as rates are at record lows as well.

To your questions regarding the future of retail it’s all about finding internet resistant tenants that can’t operate online and are insulated against a downturn like fast casual restaurant, coffee shops, hair salon, nail salon, dry cleaning, medical, dental etc. These are the CORP services that people always need.