We often pass by retail stores without fully realizing the diverse range of commercial real estate options they represent. Today, we're taking a closer look at two specific types of retail enterprises that CMK Properties favors for investment and development: discount and specialty retail.
Discover the advantages of investing in Single Tenant Net Lease (STNL) developments at CMK Properties, including predictable cash flow, strategic focus, and attractive financing options.
At CMK Properties, we specialize in providing solid and stable real estate investment opportunities for our investors. One of our key investment strategies is Single Tenant Net Lease (STNL) developments, which offer several benefits that align with our investment approach. In this blog post, we will explore three key advantages of investing in STNL properties, including predictable cash flow, strategic focus, and attractive financing options.
1. Predictable Cash Flow with Single Tenant Net Lease (STNL) Investments
STNL investments are designed to reduce the variables and risks associated with traditional real estate deals. Our STNL properties are 100% pre-leased to a single, credit-worthy tenant for a long-term lease with an initial base term of 10-20 years. This eliminates the lease-up risk and stabilization period and in turn provides a stable rental income stream throughout the investment term. Moreover, the periodic increases in rental rates built into the lease agreement serve as a hedge against inflation, ensuring consistent rental income for investors.
Additionally, the leases are triple-net (NNN), meaning the tenant is responsible for all operating expenses during the lease term, including common area maintenance, insurance, and property taxes. This further minimizes risks and provides a predictable cash flow stream to investors, making STNL investments an attractive option for those seeking stable returns.
2. Strategic Focus for Solid Returns
Our investment strategy at CMK Properties focuses on high-demand industries that are resilient to economic cycles and competition from outside threats like Amazon. The single tenant nature of STNL investments allows us to target specific tenants in industries such as Early Childhood Education, healthcare (Urgent Care, Dialysis), and specialty retail (Tractor Supply, TriGreen Equipment) that align with our investment criteria.
This strategic focus ensures solid and stable returns for our investors, as these industries have demonstrated consistent demand and growth potential. By carefully selecting tenants based on our investment strategy, we can mitigate risks and maximize returns for our investors.
3. Attractive Financing and Robust Capital Markets
Due to the reduced risks associated with STNL properties, traditional real estate lenders such as commercial banks offer attractive financing terms, including lower interest rates, fees, and higher loan-to-value ratios. This can directly increase returns for investors, as favorable financing terms lower the cost of capital and enhance the overall profitability of the investment.
Moreover, STNL investments attract interest from various types of buyers, including private capital, large institutions, and publicly traded Real Estate Investment Trusts (REITs). Our flexible STNL fund strategy allows us to market our properties individually or aggregate them to attract larger buyers, maximizing returns for our investors.
In conclusion, investing in Single Tenant Net Lease (STNL) developments offers several advantages for investors. The predictable cash flow, strategic focus on high-demand industries, and attractive financing and capital market opportunities make STNL investments a compelling option for those seeking stable and profitable real estate investments. To learn more about STNL investment opportunities, contact us at CMK Properties today.