Is A Triple Net Commerical Property A Minneapolis Duplex Exit Strategy?
Matt Hazelton, JLL Commercial
After decades of duplex ownership, many Minneapolis and St Paul housing providers want to slow down.
The challenge is if they sell their properties and cash out, they can lose a lot of equity through capital gains tax and depreciation recapture. And they don’t want to exchange into a bigger multifamily property only to perpetuate the work.
There are other options, including different types of real estate. For example, a commercial building called a triple-net (NNN) property may be a relatively hands off turn-key solution.
A triple net property is a commercial building where the tenant is responsible for rent, all the operating expenses, and utilities. These expenses include: real estate taxes, insurance, maintenance and repairs, and common area maintenance (CAM).
NNN leases are common for commercial properties like retail spaces, offices and industrial buildings. They’re popular with many real estate investors because they require less involvement than a multifamily property.