Net leases: what are they and why are they so popular?

Article Abstract:

Net leases are in single net, triple net, and bondable form. All forms of leases use rental adjustments to preserve the investment yield required by the lessor. These rental adjustments include short-term leases, index leases, reappraisal clauses, step-rate leases, and escalator leases. Net leases are used as substitutes for rental adjustments and guarantee a constant net operating income over the lease term. The net lease provides a lessee protection from future rent increases, and reduction of investment risk for the lessor. Net leases are bondable, so they can be securitized and be placed on either public or private market.

Lessors of Real Estate, Real Estate Operators and Lessors, Real Property Lessors, Landlords

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The appropriate solution: synthetic leases vs. bond net lease

Article Abstract:

An analysis was conducted on the basic structure of the synthetic lease, the accounting position of the lessee, the after-tax position of the lessee, the benefits and disadvantages of this type of lease and its comparison with the traditional bond lease. Findings suggested that synthetic leases may be reasonable alternatives to other forms of short-term financing but they are not appropriate solutions to the long-term financing of long-term assets.

Real Estate, Real Estate and Rental and Leasing

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Net leases as real estate investments

Article Abstract:

The net lease is again considered a viable real estate investment structure. General information on net leases as investments is presented. The triple net lease, because it provides benefits to both tenants and investors, is a preferred lease form. Net leases are bondable, and they can therefore be securitized and issued on private or public markets.

United States, Open-End Investment Funds, Investment Funds & Trusts, Management, Evaluation, Investment companies, Real estate investment, Real estate investments

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