Triple net leasing will not be active unless the taxpayer qualifies as a real estate professional.
Suppose our broker owns a building that is triple net leased to a credit tenant for a very long term.
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Often a triple net lease will contain contractual annual rent escalations, providing the REIT with steady cash flow growth over time.
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There are three classic lease structures: net, net-net and triple net.
Many leases in the healthcare sector are long in duration and triple net, meaning the tenant is responsible for taxes, insurance, and common area maintenance fees.
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The triple net feature allows for a more predictable cash flow stream because the building owner is not burdened with having to pay for the variable costs.
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Interesting to note that ARCT is now the second largest triple net sector REIT and its smaller sister REIT, ARCP, invests in similar property types with the exception that ARCP invests in medium duration leases and ARCT invests in long-term leases.
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Triple net leased real estate will not qualify as being actively managed, so many older taxpayers are encouraged to have their real estate endeavors be actively managed, which will now have twin purposes with the 3.8% Medicare tax discussion described above.
In triple-net leases, the tenant pays a pro-rata share of all property expenses.
Both Cole's and Spirit's strategy is to sign what are known as triple-net leases with retailers.
The retail sector REITs consist of three sub-sectors, including shopping centers, regional malls and free-standing (or triple-net).
Triple-net leases are typically long-term deals signed by retail tenants for free-standing buildings in which the tenants pay most of the expenses.
The triple-net REITs own properties leased primarily to single tenants in separate buildings who pay for all maintenance expenses, property taxes and insurance.
LabCorp lowered its sales, general and administrative expenses to 21% of revenue last year from 26% in 1999, enabling it to almost triple the net margin to 11.8%.
She went on to nearly triple her husband's net worth, the article said.
Compaq also announced its new Triple Play broadband Internet access program, which offers customers a choice of three high-speed Net access options: cable modem, DSL, and satellite.
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