Considering this NNN lease purchase. The tenant has 5 more years on the lease with 2% rental increases a year. Looks like a 5.5% cap. Lot’s of foot traffic in downtown. It would be easy to find a new tenant if dunkin goes dark after 5 years. What do you think?
If there are only 5 years left on the lease, you may want to consider making an offer at a 6% cap. Will the tenant execute a ten year term at the close of escrow if there are incentives?