When evaluating single tenant investment properties for sale, how much does a 5 year lease detract from the value of a property versus a 10 year lease, if at all. Also, how much does a gross lease detract from the value compared to a NNN lease? Is there an easy way to evaluate this? Assume all other factors are equal - location, tenant strength, market, etc.
- National credit tenant w/ corporate signature
- Just signed 5 year option - four 5 yr options remain
- Been at location for +/- 20 yrs
- Located on main retail corridor w/ other national tenants
- New NNN lease deals of same tenant are pricing w/ cap rates in the 5.5 - 6% range