Triple Net Property: Selling vs. Refinancing vs. Holding
What circumstances dictate whether triple-net investors sell vs. refinance vs. hold a property. Is it just based on strategy preference?
Here's my scenario:
- Modified double-net lease. Landlord responsible for structural maintenance, roof, and major parking lot maintenance.
- Tenant responsible for taxes, insurance, and day-to-day maintenance.
- Credit tenant
- Purchase price = 1,600,000, NOI = 99,000, Cap = 6.1
- 10-year lease, three 5-year extensions, rent escalation of 6% every 5-years of lease term.
What sort of exit strategy makes sense here? Sell at year 5? Refinance at year 5? Hold and hope lease extensions are executed for a full 25-years?
Thanks for any insight here.