NNN Lease Financing: Tenant-Credit-Driven Rates for Single-Tenant Net-Leased CRE

In a triple net (NNN) lease, the tenant pays all operating costs — property tax, insurance, maintenance — in addition to base rent. That makes the landlord's cash flow equal to net rent, with no operating risk. Double net (NN) leaves one expense (typically structural maintenance) with the landlord. Gross leases have the landlord paying everything. CMBS conduits price NNN tightest because the cash flow is cleanest.

Yes — but pricing is materially wider. CMBS conduits that accept franchisee NNN deals (Dunkin, Subway, Little Caesars, etc.) price 100–300 bps above corporate-guarantee equivalents. Max LTV drops to 55–65%. Bank and private credit lenders often offer more flexibility on franchisee NNN. SBA 504 is available if the franchisee is owner-occupied.

Tenant credit is the largest single variable. A AA-rated tenant (Walgreens, Chase) prices 5.75–6.50% on 10-yr CMBS. A BBB-rated tenant (7-Eleven, AutoZone) prices 6.50–7.25% — a 75–100 bps spread on the same physical property. An unrated franchisee on the same corner prices 7.25–9.25%. Rating agencies (S&P, Moody's, Fitch) publish corporate credit ratings quarterly; conduits update pricing spreads in response.

CMBS NNN financing is non-recourse with standard bad-boy carve-outs (fraud, misappropriation of funds, voluntary bankruptcy). Bank NNN financing may be recourse or partial-recourse depending on LTV and sponsor. Life company NNN financing is non-recourse. Franchisee NNN deals done via SBA 504 require a personal guarantee from the owner-operator.

Yes — NNN is the most 1031-friendly asset class because of its passive income profile and scalability. The challenge is execution: 45 days to identify, 180 days to close. We coordinate rate lock with your qualified intermediary (QI) and the CMBS conduit's securitization schedule to avoid the property falling out due to lender timing.

Dark value is what the property is worth if the current tenant leaves and you have to re-lease to a lower-credit replacement. CMBS conduits model dark value because a Walgreens-occupied box in a strong market might be worth $5M, but if Walgreens leaves and the best replacement tenant is a regional grocer, the re-leased value might be $3M. Conduits lend to the dark value, not the lease-in-place value — especially for single-tenant deals with less than 10 years of remaining term.

CMBS NNN: 45–75 days from term sheet to close. Bank NNN: 30–60 days. SBA 504 NNN (owner-occupied): 45–90 days. 1031 exchange deals can close inside the 180-day window with proper upfront coordination — but require rate lock within 30–45 days of term sheet to hold pricing.

No retainers, no consulting fees. Our compensation is established upfront and paid at closing — typically by the lender or split with the borrower depending on deal structure. Initial consultation and tenant-credit indication are complimentary.