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Current market yields: NNN properties stack up competitively vs. stocks, bonds, and REITs.
NNN properties offer 180-240 bps yield advantage over 10Y Treasuries and 2-3% premium over Multifamily/Industrial CRE. S&P 500 dividend yield (~1.4%) reflects growth expectations; NNN provides stable income with modest appreciation. REIT dividends (~4.2%) are diluted by share dilution and management fees; direct property ownership typically outperforms on a risk-adjusted basis.
Tenant handles operations; passive income with leverage available; depreciation tax shield
Illiquid, tenant credit risk, lease expiration risk; requires active management at exit
Understand what each metric measures and when to prioritize it.
Definition: Annual NOI divided by purchase price
Range: 5.5-7.5% for NNN
When to prioritize: Primary metric for stabilized, income-focused deals
→Cap Rate CalculatorDefinition: Annual cash distributions divided by equity invested
Range: 7-10% typical for 50% LTV
When to prioritize: Critical for levered acquisitions and leverage impact modeling
→Cash-on-Cash Return CalculatorDefinition: Annualized total return including appreciation and distributions
Range: 10-14% target for institutional deals
When to prioritize: Preferred by most institutional investors; accounts for timing and exit
→IRR (Internal Rate of Return) CalculatorDefinition: Total cash returned divided by initial equity invested
Range: 1.5-2.2x typical for 7-year hold
When to prioritize: Long-term wealth creation metric; independent of holding period
→Equity Multiple CalculatorNNN cap rates have compressed 80-120 bps over the last 3 years as institutional capital chased yield. Historical average: 6.5-7.0%. Current 6.25% reflects tighter spreads over 10Y Treasury (220 bps, historically 250-350 bps). This suggests limited margin of safety; future rate hikes could cause expansion. Compare to highest-spread periods in 2011 (8.0%+ cap rates) for context on cycle positioning.
Projected IRR, equity multiple, and total return for a sample $2M NNN deal at different exit points.
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Data and analysis on this page are for informational purposes only and do not constitute investment, financial, or tax advice. Figures may be estimated from publicly available sources and should be verified with primary data providers (CoStar, MSCI RCA, CBRE, FRED) before use in investment decisions. Past performance does not guarantee future results.