Top 5 Best NNN Properties to Buy for Your 1031 Exchange
Hi, my name is Alex Casablanca, Managing Broker at Casablanca Triple Net Advisors. Today I am going to talk to you about the Top 5 Best NNN Properties to Buy for Your 1031 Exchange.
Buying a Single Tenant NNN property is the best alternative for your 1031 Exchange Replacement property. A Single Tenant NNN property offers the investor a truly passive income investment with no landlord responsibilities. The Tenant takes care of pretty much everything and your rental income is net.
But the question that most investors have is: What is the Best NNN Property to Buy for my 1031 Exchange. In this short video I’m going to tell you the top 5 categories and several examples of top Tenants in each category.
First, the Best NNN Properties are the ones in which the Tenant provides an essential and Irreplaceable product or service to the consumer. As we all know, technology has created drastic changes in consumer spending and behavior. Nowadays we can buy pretty much anything on Amazon, so it is very important to focus our search on properties and brands that could be considered “Amazon Proof”.
The main necessities that we have as humans and as a society are: 1. Food, 2. Shelter, 3. Health, 4. Gas, 5. Transportation, among others. Those are the things that we cannot buy on Amazon neither now nor in the foreseeable future.
Now in the context of NNN Properties, what are those Tenants and how can we find them. So let’s get into the Top 5 Best NNN Properties to Buy for your 1031 Exchange.
1- Fast Foods and Coffee Shops
Fast Foods and Coffee Shops are the preferred NNN property segment for NNN and 1031 exchange investors in general. Within the context of Food as a primary necessity, fast food restaurants provide that necessity quickly, with maximum convenience and efficiency. Coffee, although not a primary necessity, most of us cannot live without our cup of coffee in the morning.
Nowadays you can order your food or coffee from your phone and you can even get delivered to your door. During the Covid 19 pandemic most fast foods restaurants stayed open and continued operating through the drive-thru, and continued making the monthly payments without disruptions.
The fast foods brands that we recommend the most are: McDonald’s, Chick-Fil-A, Chipotle, Taco Bell, Wendy’s, Popeyes, among others. These are strong companies with strong business models and customer recognition. The coffee brands that we recommend the most are Starbucks, Dutch Bros and Dunkin Donuts.
2- Medical Healthcare Facilities
Medical and Healthcare facilities are an excellent NNN Investment. With the current medical advances and medications people are living longer increasing the need of medical care. Particularly Urgent and Primary Care facilities are in the first line of necessity and accessibility for the consumer when they have an immediate medical need. Dialysis centers are in the 2nd layer of medical necessities but are also an excellent investment alternative. There are several well known and established medical care companies such as Davila, Fresenius, Med Express, Well Now, Fast Pace Urgent Care, among others.
3- Drug Stores and Pharmacies
Pharmacies and Drug stores can make a good replacement property for your NNN 1031 Exchange. Pharmacies are also in the first layer of necessity for consumers. Beyond the traditional pharmacy, since the Covid 19 pandemic they have transitioned into providing primary care as well, such as vaccination and lab tests services, among others. Some of them have also started to test with smaller buildings to serve and deliver prescriptions quicker. The top 2 Drugstores in the United States are Walgreens and CVS, both of them are investment grade tenants with a solid reputation.
4- Gas Stations and Convenience Stores
Gas stations and convenience stores can also make a great replacement property for your NNN 1031 Exchange. Gas is another essential and primary necessity that we will never be able to buy on Amazon. Moreover, most gas stations nowadays come with a state of the art convenience and fast food store as well, in which people can buy food, drinks, snacks, products of primary necessity among many other things. Even with the proliferation of Electric Vehicles technology gas stations have started to install electric charging stations in their facilities. So, Gas Stations and Convenience stores are not going away for the foreseeable future.
The top gas stations that we recommend the most are 7-Eleven, Wawa, RaceTrac, among others. These are very strong companies with strong business concepts. Moreover, the leases are guaranteed by strong and stable companies.
5- Dollar Stores
Dollar Stores are also in the first layer of necessity for the consumer. They continued operating successfully during the pandemic even with the global supply change complications. Nowadays Dollar Stores are transitioning into the grocery market concept, in which they also sell groceries of primary necessity such as milk, fruits, vegetables, chicken and seafood. The top two Dollar Stores are Dollar General and Dollar Tree, both are Investment Grade and Fortune 500 companies, with a strong business concept and solid track record.
In summary the Top 5 Best NNN Properties to Buy for your 1031 Exchange Are:
1- Fast Foods and Coffee Places
2- Medical and Primary Care Facilities
3- Pharmacies and Drug Stores
4- Gas Stations and Convenience Stores
5- Dollar Stores
The key concept is choosing a company for your NNN 1031 Exchange that provides an essential and irreplaceable product or service to the consumer. Please also take a look at our previous article called The Top 5 Benefits of Buying a NNN Property.
At Casablanca, we specialize in representing NNN Buyers and 1031 Exchange Investors Nationwide USA. We have the knowledge and expertise to guide you along the way from market research, identifying potential properties, submitting offers and negotiating them, due diligence, up to the closing table. We have helped many NNN Buyers and 1031 Exchange Investors in finding and negotiating the best property according to their investment goals and risk tolerance. We have the patience and expertise to work with our client at their own pace.
Moreover, we represent our Buyers for Free since we get paid from the Seller, and we also Pay for our Buyer’s Closing costs up to a maximum of $10k. This incentive will offset or cover completely the major Buyer’s closing costs expenses such as Title Fees, Attorney Fees, Recording Fees, among others. We are the Brokers that give you more in exchange for your trust.
If you have any questions feel free to contact me directly at 407-205-7570 or you can also email me at [email protected]. Feel free to call me anytime at your convenience, I’m always available for my clients. Thank you very much for watching this video and I’m looking forward to speaking with you.