NNN Reit

A NNN REIT, also known as a Triple-Net Lease REIT, is a type of Real Estate Investment Trust (REIT) that focuses on properties leased to tenants under triple-net lease agreements. These leases require the tenant to pay not only the rent but also most or all of the operating expenses associated with the property. These expenses typically include real estate taxes, building insurance, and maintenance.

In a NNN REIT structure, the REIT owns the property and collects rent from the tenant. The tenant, in turn, is responsible for the aforementioned property-related expenses. This arrangement reduces the REIT's operational burden and risk compared to other types of REITs where the landlord assumes greater responsibility for property expenses.

NNN REITs often invest in single-tenant properties occupied by well-established businesses, such as retail stores, restaurants, drug stores, and convenience stores, frequently under long-term leases. This structure can provide a relatively predictable and stable income stream for the REIT and its investors. However, risks remain, including tenant default, property vacancy upon lease expiration, and unforeseen major repairs that might become the REIT's responsibility depending on specific lease terms.