In this episode, Adam Carswell and Michael Flight work through a sample offering memorandum to show investors how to read and understand a potential acquisition from its given written information. (To follow along with Michael and Adam, watch the video HERE to see them actually going through the offering memorandum!) They discuss how investors must evaluate for growth rates, economic prospects, and especially the government structure after choosing a location(s) for net lease properties. Michael shares why and how to assess the location and trade area of prospective Triple Net properties through the Walgreens sample offering memorandum. Michael and Adam point out other important metrics to pay attention to and what they mean, including the price per square, building attributes, lease term, and more. They wrap up by giving investors some advice on what to do before signing a net lease property, especially why to physically visit a property location.
Timestamped Shownotes:
03:01 – What should investors evaluate potential net lease properties for after choosing a location?
05:50 – Why should you seek out multiple reputable real estate brokers before investing in Triple Net (NNN) properties?
06:26 – Why must investors evaluate offering memorandums after the acquisition criteria of net lease real estate?
07:20 – Co-hosts Adam Carswell of Liberty Real Estate Fund and Michael Flight, founding Partner and CEO of Liberty Real Estate Fund, introduce the case study of a real Walgreens offering memorandum they evaluated
07:38 – Why do tenants require investors to sign confidentiality agreements when closing a net lease deal?
09:15 – What are the first steps of evaluating an offering memorandum?
09:53 – What do investment highlights of an offering memorandum tell investors about the Triple Net property?
11:10 – Why and how should investors check the physical location of the NNN property?
14:33 – How does the trade area affect the business of a net lease property?
18:33 – What physical attributes of the building should investors look for in an offering memorandum, specifically with drugstores?
20:14 – Why does the price per square foot matter for a net lease property based on location?
21:38 – Why does the density of a population and competing store locations in the trade area affect business?
23:34 – How does the traffic flow affect the success of a net lease property location?
26:17 – What is a reciprocal ease agreement and how does it generate business for NNN tenants?
27:45 – What other aspects are important to note in an offering memorandum and look into?
28:38 – What are the basic metrics to look for in this NNN Walgreens offering memorandum?
30:30 – What does the lease term of a net lease property tell investors?
31:08 – Why do real estate taxes matter to tenants and investors?
32:20 – Why do investors have to verify that a property is Triple Net in the offering memorandum?
33:15 – Why evaluate the time of construction of a net lease building?
33:52 – How do rent escalations add value to Triple Net real estate?
34:45 – Why should investors physically visit the property before buying?
Key Points:
1. How to evaluate the Offering Memorandum of Triple Net property buildings
2. Importance of evaluating the Location of Triple Net (NNN) properties
3. How population density and traffic patterns affect Net Lease properties’ success
For more information contact us here and mention Nothing But Net or simply NNN:
For more information on:
Liberty Real Estate Fund LLC (https://libertyfund.io/)
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