Best NNN Tenants for a 1031 Exchange: Buyer Comparison Guide

Which NNN Tenant Is Best for Your 1031 Replacement-Property Search?

There is no single best NNN tenant for every buyer. Compare the actual lease, named tenant and guarantor, remaining firm term, location, landlord obligations, and purchase economics against your budget and hold period. A well-known brand is not a substitute for reviewing the property documents.

This guide compares six tenant categories as a starting point, not a ranking of current offerings. It does not quote live availability, current credit ratings, or guaranteed returns. For acquisition help, see our 1031 NNN replacement-property search process and buyer-representation services.

Compare Six NNN Tenant Categories

Dollar General: Focus on the Site and Actual Lease

Evaluate the local trade area, competition, store condition, and rent relative to comparable locations. Read the lease for roof, structure, capital replacement, rent increases, and assignment provisions. A lower asking price or an NNN label does not by itself establish an attractive investment. Our Dollar General investment guide provides additional background.

McDonald's: Distinguish a Ground Lease from a Building Lease

Establish what real estate is being purchased and who owns the improvements. Confirm the tenant entity, guaranty, remaining firm term, renewal options, and responsibilities at expiration. Compare the purchase price and income with alternatives rather than assuming the brand justifies any price.

Starbucks: Examine Drive-Thru Rights and Location Economics

Check access, parking, permitted use, drive-thru approvals where relevant, and available store-performance information. Review the actual tenant and guarantor and any termination or relocation rights. A drive-thru can be an important site feature, but it does not guarantee sales, renewal, or resale value.

AutoZone: Reconcile Rent and Re-Leasing Exposure

Confirm the remaining firm term, rent steps, landlord work, and expenses before calculating NOI. Consider building condition, competing stores, access, and alternative users if the tenant leaves. Compare property-specific economics with O'Reilly Auto Parts investment considerations, not just brand recognition.

7-Eleven: Add Fuel and Environmental Questions Where Relevant

First determine whether the site includes fuel operations. Where it does, coordinate environmental review, tank information, and responsibility for compliance and remediation with qualified specialists. Verify the tenant and guarantor rather than treating a parent-company brand as a guaranty of the lease.

Walgreens: Scrutinize Location and Closure Exposure

Review current tenant financial information, the location's operating context where available, lease protections, assignment rights, and alternative uses. Separate a long remaining lease from assumptions about renewal or continued operation. Neither pharmacy use nor a long lease makes income risk-free.

A Practical Shortlist Checklist

• Budget and funding: Confirm your acquisition range and financing feasibility with your lender and advisers.
• Income: Reconcile the rent roll and lease with actual expenses and any outstanding landlord obligations.
• Term: Distinguish the firm lease term from tenant-controlled renewal options.
• Credit: Identify who is legally responsible for rent and what information supports that assessment; ask independent counsel to review the documents.
• Property: Coordinate inspection, title, survey, and environmental work as appropriate with the relevant specialists.
• Closing feasibility: Ask what documents are available and whether seller, lender, and diligence schedules fit the dates confirmed by your QI.

How Should Exchange Timing Affect Tenant Selection?

Do not choose a tenant solely because a property appears easier to find quickly. Start your brokerage search before your sale closes when possible, and build a shortlist that can be evaluated with adequate documents. Your qualified intermediary and independent advisers must confirm identification, completion, and eligibility requirements for your transaction. No tenant category guarantees a timely or qualifying closing.

Start with Your Property Criteria, Not a Brand Ranking

Tell us your target purchase range, preferred markets, funding approach, desired lease term, and any dates confirmed by your QI. We help source candidates, compare lease economics as your broker, and coordinate acquisition work with your team. You do not need every answer to begin a conversation.

Explore our NNN property-search guide or discuss your replacement-property search with The ESS Group. Property availability and terms require individual confirmation.