Long lease. Credit tenant. Mailbox money.
The most common 1031 replacement for landlords ready to stop managing tenants — but not ready to stop owning real estate. Investment-grade tenant. 10–20 year lease. The tenant pays the taxes, the insurance, and the maintenance. You collect the rent.
An NNN lease shifts every variable cost to the tenant.
Under a triple net lease, the tenant pays for the three things that usually keep landlords up at night: property taxes, insurance, and maintenance (the "three nets"). The base rent is set lower than a gross lease to offset that — but the income stream is far more predictable, because rising taxes or a new roof don’t come out of your check.
You stay the owner. You collect a fixed rent that escalates on a schedule. You don’t take tenant calls. You don’t schedule repairs. The tenant runs the property like it’s their own — because, financially, it is.
Gross lease
- Landlord pays taxes, insurance, maintenance
- Higher base rent
- You absorb cost increases
- Active management required
Triple Net (NNN)
- Tenant pays taxes, insurance, maintenance
- Lower base rent
- Tenant absorbs cost increases
- Essentially passive ownership
Six reasons NNN is the exit-active-management default.
True passive income
No tenant calls, no maintenance coordination, no leasing turnover. The tenant runs the property. You collect the rent.
Long, escalating lease
10–20 years of contracted rent with built-in increases — typically 1.5%–2% annually, or 10% every 5 years on renewal.
Credit tenant
Investment-grade businesses (Walgreens, Starbucks, FedEx, Chick-fil-A, Dollar General) sign these leases. Their corporate guarantee backs the rent.
1031-eligible
NNN qualifies as like-kind under §1031, letting you defer 100% of the capital gains, state, and depreciation recapture taxes from your prior sale.
Predictable economics
No surprise costs hit your check. Property taxes go up — that’s the tenant’s problem. HVAC dies — also the tenant’s. The rent is the rent.
Estate-friendly
Long-duration NNN with strong credit reads more like a bond than a rental. It transfers cleanly to heirs and is easy to value for trust planning.
Ready to see what an NNN match looks like?
Tell us your investment size, tenant preferences, and 1031 timeline. We’ll match you with a specialist who places NNN deals every week.
Cap rates, lease terms, and what a real deal looks like.
NNN cap rates are a function of two things: tenant credit and lease term remaining. The stronger and longer, the tighter the cap. Here’s roughly where the market sits today.
Numbers reflect general market conditions for 2026. Specific deals vary by market, asset type, and individual lease terms. Your matched specialist will price your situation precisely.
A real-world example
A retiring landlord sells a $2.4M apartment building in San Diego. After tax, that’s roughly $700K of friction. Instead, they 1031 into a $2.4M Chick-fil-A NNN in suburban Phoenix: 20-year lease remaining, 10% increases every 5 years, 5.5% cap rate. That’s $11,000/month of net income with zero management, zero tax bill, and a corporate-guaranteed lease through 2046.
From QSR to industrial, with a clear credit story.
The right tenant type depends on your risk tolerance, cap rate target, and how long a lease you want remaining. Our NNN specialists source across all of these — directly or through DST-fractional NNN for accredited investors.
QSR (Quick-Service Restaurants)
Examples: Chick-fil-A, Starbucks, McDonald’s, Chipotle, Taco Bell
Typical: 15–20 year lease, 5.0%–6.0% cap, corporate guaranty on top brands
Pharmacy & Drugstores
Examples: Walgreens, CVS, Rite Aid
Typical: 10–25 year base + renewal options, 5.5%–7.0% cap, declining in 2026 as retail rebalances
Dollar Stores
Examples: Dollar General, Family Dollar, Dollar Tree
Typical: 10–15 year lease, 6.0%–7.5% cap, single-store guarantee (not corporate)
Medical / Dental
Examples: Dialysis clinics (DaVita, Fresenius), urgent care, dental groups
Typical: 10–15 year lease, 6.0%–6.5% cap, sticky tenants (high move costs)
Industrial / Logistics
Examples: Amazon last-mile, FedEx, manufacturing, cold storage
Typical: 5–15 year lease, 5.5%–6.5% cap, strong demand in 2026
Auto Service / C-Store
Examples: Jiffy Lube, Valvoline, 7-Eleven, Wawa, Mister Car Wash
Typical: 15–20 year lease, 6.0%–7.0% cap, "essential service" resilience
NNN is the default 1031 destination for retiring landlords.
If you’re selling investment property and the proceeds belong in real estate but you’re done being a landlord, NNN is the cleanest answer. The mechanics:
- Engage a qualified intermediary (QI) before closing. The QI holds your proceeds — you can never touch them.
- Identify replacement candidates within 45 days. An NNN specialist can have 3–5 vetted, in-market deals ready to identify on day one.
- Close on your replacement NNN within 180 days. NNN transactions are clean — single tenant, clear lease, no operational diligence — so 180 days is usually plenty.
- Match or exceed your prior debt. If your sold property had a mortgage, the replacement needs equal debt or you’ll owe tax on the difference (mortgage boot).
The full 30–40% combined federal + state + recapture tax on your prior gain stays deferred — indefinitely, as long as you don’t cash out. At death, your heirs receive a stepped-up basis and the deferred tax evaporates entirely.
NNN isn’t the right answer for everyone.
We’re a referral platform, not a sales floor — so here’s the short list of reasons NNN might not fit. Read this before you sign anything.
Single-tenant concentration
If your one tenant defaults, your income goes to zero overnight. Diversifying across two or three NNN deals (or going fractional via DST) is the standard mitigation.
Long-term industry risk
A 20-year lease locks you into one industry’s trajectory. Retail evolved fast in the last decade. Pharmacy is restructuring right now. Pick tenants whose business model holds up under stress.
Capped upside
Rent escalations are contractual. If the market rent in your location doubles, you don’t capture it. NNN is a yield play, not an appreciation play.
Illiquidity
Selling an NNN takes 60–180 days. It’s a real estate transaction, not a brokerage trade. Don’t buy NNN with money you might need in the next 5 years.
End-of-lease optionality
When the lease ends and the tenant doesn’t renew, you own a single-purpose building. Re-leasing or repurposing can take time and capital. Build that risk into the cap rate you accept.
Capital requirements
Direct-ownership NNN deals typically start at $1M. Below that, fractional NNN via a DST (starting around $100K, accredited investors only) is usually the path.
If three or more of these are true, NNN should be on your list.
- You own an investment property and you’re tired of managing it.
- You’re planning a sale and want to defer the capital gains tax.
- You want steady monthly income, not appreciation upside.
- You’re in or near retirement and want predictable cash flow.
- You have $1M+ in proceeds (or $100K+ and you’re accredited, for a DST-fractional path).
- You’re comfortable holding a property 7–15 years.
- You want real estate ownership without the operations.
Sounds like you?
A 2-minute survey is the fastest way to see if our network has the right NNN match in front of you. Free, no obligation, no spam.
Start the NNN matchNNN is one of three paths. Here’s when the others win.
A 1031 doesn't force you into NNN. If you want active equity-style returns, a direct multifamily reinvestment is better. If you want full diversification and lower minimums, a DST. If you want truly hands-off real estate with a fixed lease, NNN is the answer.
Long lease. Credit tenant. Mailbox money.
We match accredited investors with NNN properties — directly or fractionally — that fit their cap rate, tenant credit, and geographic preferences.