Posted by john on November 30, 2007 at 14:19:22:
8% cap rate is a good rate in todays market place for triple net properties. The 12% increase every 5 years is attractive as well (most are 10%) Are they an “A” credit tenant? If they are then they are more likely to renew, especially if it’s a highly commercialized area. The question you need to ask yourself as far as risk is the following: what is the likely hood of getting a new tenant on the land if your existing tenant leaves. I have a tenant with 5 year options, and I can only hope they go belly up because I know the land is worth a mint and will demand higher rents for the next tenant to be.