NNN Yield
Benchmarks

The spread (currently 185 bps, or 1.85%) represents the extra yield you earn for taking on the risks of owning real property versus lending to the U.S. government. It compensates for credit risk (the tenant could default), illiquidity (you can't sell overnight), and operational complexity. When spreads are wide, NNN is relatively cheap — you're getting well-paid for the risk. When spreads compress below 150 bps, you're getting less compensation and should be more selective. The current 185 bps spread is attractive by historical standards.

The S&P 500 dividend yield (1.1%) is what you'd earn in income from a broad stock portfolio. NNN yields 5.87%, which is 4.72% more income for every dollar invested. However, stocks offer capital appreciation potential that NNN properties may not match. The comparison reveals NNN's income advantage: for every $1M invested, NNN generates ~$59K/year vs ~$12K from S&P dividends — a difference of $47K annually. For retirees or income-focused investors, this difference is the entire argument for NNN.

REITs yield ~4.07% with daily liquidity — you can buy/sell shares any time. Direct NNN yields 5.87% with 3-6 month sale timelines. The extra 1.80% from direct NNN compensates for that illiquidity. But the real advantage is control: direct NNN owners choose their tenants, negotiate lease terms, access 1031 exchanges for tax deferral, and take depreciation deductions. REIT dividends are taxed as ordinary income. For investors with $1M+, direct NNN often provides better after-tax returns despite lower liquidity.

CDs currently yield ~3.50%, which is risk-free and guaranteed. But that's 2.37% less than NNN — on a $1M investment, that's $24K less annual income. More importantly, CDs lose purchasing power to inflation. At 2.4% inflation (CPI-U Jan 2026, BLS), a 3.50% CD delivers only ~1.1% in real returns. NNN properties hedge inflation through rent escalators and property appreciation. Over 10 years, the compound difference between CD and NNN income is enormous — and NNN provides potential capital gains on top.

Corporate bonds at ~5.52% yield more than Treasuries but every dollar is taxed as ordinary income. NNN properties offer depreciation deductions that shelter a significant portion of cash flow from taxes. A typical NNN property depreciates over 39 years, sheltering roughly 25-30% of annual NOI. Plus, 1031 exchanges allow you to sell and reinvest without paying capital gains tax — indefinitely. And at death, heirs receive a stepped-up basis, potentially eliminating all deferred taxes. No bond offers anything comparable. After tax, NNN often outperforms corporate bonds by 200+ bps.