I would check if there is any "cap" clause on any of NNN reimbursement such as tenant can pay only upto certain amount (designed to protect tenant when property is transferred at a higher tax rate). I would say 8% Cap or better for A credit tenant would be a good buy but check the term of the lease, preferably 10+ year left as well as base rent is not too inflated compared to size of the property. The value can either go down or go up depending on market rate. Value will go up if current rent is below market rent but value will drop if current rent is higher than the rent.
Apr 23, 2010