Question 1

What is a Triple Net (NNN) lease?

Accepted Answer

A Triple Net lease (NNN) is a commercial lease where the tenant pays base rent plus all three major operating expenses: property taxes, building insurance, and maintenance. As the owner, you collect rent with virtually zero management responsibilities — the gold standard for passive real estate income.

Question 2

What cap rates should I expect for NNN properties in 2025?

Accepted Answer

NNN cap rates in 2025 typically range from 4.5% to 7.5% depending on tenant credit quality, lease term, and location. Investment-grade tenants like McDonald's and Starbucks trade at 4.5–5.5%, while strong regional tenants like Dollar General trade at 6.0–7.15%.

Question 3

Can I use a 1031 exchange to buy a NNN property?

Accepted Answer

Yes — NNN properties are one of the most popular 1031 exchange replacement properties because they offer passive, management-free income with corporate-guaranteed leases. You have 45 days to identify a replacement property and 180 days to close. The ESS Group specializes in sourcing NNN replacements for 1031 exchange clients on tight timelines.

Question 4

What is an absolute NNN lease?

Accepted Answer

An Absolute NNN lease makes the tenant responsible for everything — including structural repairs and roof replacement — in addition to taxes, insurance, and maintenance. This is the most landlord-favorable lease structure, offering truly zero-management ownership.

Question 5

How much do I need to invest in a NNN property?

Accepted Answer

NNN properties typically range from $1M to $10M+. Most individual NNN properties from major tenants (McDonald's, Starbucks, Dollar General) are priced between $1.5M and $5M. With financing, you can often acquire a NNN property with 25–35% down.

Question 6

What is cost segregation and how does it benefit NNN investors?

Accepted Answer

Cost segregation is an IRS-approved tax strategy that accelerates depreciation on your property by identifying components that can be depreciated over 5, 7, or 15 years instead of 39 years. For NNN investors, this can generate substantial paper losses in the first year — often $150,000–$500,000+ per $1M invested — significantly reducing your tax bill.

Question 7

Does The ESS Group work with 1031 exchange clients on tight timelines?

Accepted Answer

Yes — we specialize in it. We maintain an inventory of pre-vetted NNN properties and off-market deals specifically for 1031 exchange clients in their 45-day identification window. We can often present a shortlist within 24 hours of your inquiry.

Everything You Need
to Know About NNN.

NNN Basics

Still have questions?

Everything You Needto Know About NNN.

NNN Basics

Still have questions?

Everything You Need
to Know About NNN.