If you’re knowledgeable about real estate terminology, you’ve probably heard the term ‘triple net (NNN)’ or spotted an advertisement online for NNN properties for sale.
Nevertheless, if you’re a rookie who is fascinated with NNN real estate investments and want to learn more about it, you’ve arrived at the best place.
This article provides a brief overview of triple net investing and why you should consider purchasing NNN properties like Hobby Lobby real estate for sale.
What is Triple Net?
A triple-net also called Net Net Net (NNN), property refers to commercial real estate buildings with leasing contracts in which the lessee or tenant bears most of the operational costs.
In an absolute triple-net rental agreement, the tenant is typically liable for all the property’s expenses.
Typical expenditures in the contract comprise standard area maintenance costs, real estate taxes, and property insurance.
In addition to maintaining the operational costs, the occupier is responsible for the building’s day-to-day operations.
NNN leases are most prominent in retail stores, but they’re also prevalent in industrial and office facilities.
Why Choose NNN Hobby Lobby Stores?
Hobby Lobby incorporated is the largest privately-owned handicrafts retail company globally, employing around 32,000 people and operating in 47 states with over 800 outlets.
Oklahoma City is home to the corporate headquarters, comprising a 9.2 million-square-foot production, distribution, and office facility. Hobby Lobby also has offices in China, including Hong Kong, Yiwu, and Shenzhen.
Hobby Lobby is primarily an arts and crafts retailer. However, it also offers hobbies, jewelry making, picture framing, fabrics, flower and wedding materials, cards and party materials, wearable art, baskets, home decorations, and Christmas products.
Businesses affiliated with Hobby Lobby real estate include Hemispheres, which sells distinctive home accessories and furnishings from all across the globe, and Mardel Christian and Education Supply, which sells bibles, books, gifts, education supplies, church materials, and homeschooling curriculum.
What originated as a $600 enterprise has grown and expanded, allowing clients around the country to live an artistic life.
Hobby Lobby is on Forbes magazine’s yearly list of America’s top private corporations, and the company has no long-term debt.
Besides being financially stable, the company continues to grow, most likely due to its Christian-based ideals. They’re well-known for their philanthropy and charitable efforts in the community and their involvement with many other charities.
Hobby Lobby Triple-net Contract
A Hobby Lobby triple net lease can run from 5 to 15 years, but 10-year NNN leasing durations are most common due to their stellar credit history.
Hobby Lobby typically offers 15-year leases with three different 5-year optional extensions, with rent raises during initial rental terms and potential renewals.
While landlord duties vary, they’re usually released from responsibilities to building maintenance expenses.
Benefits of Acquiring Hobby Lobby Property
Some advantages of purchasing Hobby Lobby buildings include:
- You’ll have access to brand recognition on a national scale
- Stores are positioned in prime areas
- Leases are landlord-friendly, with few landlord duties
Hobby Lobby Franchise
The company is private-owned, so the general public can’t purchase a Hobby Lobby franchise. You can, however, lease an outlet for a specified timeframe.
Choosing a Hobby Lobby Store
Some essential factors to consider before paying for a Hobby Lobby triple net building include:
The Building’s Location
If you’re planning to purchase an NNN Hobby Lobby property, consider the location carefully. It may be a critical factor in determining the establishment’s success. Acquiring or investing in a structure in a remote location may make it harder for potential clients to find it.
No landlord wants to be burdened with a property that isn’t profitable. As a result, you must carefully consider the establishment’s location. Consider searching for Hobby Lobby locations in popular areas. An excellent site would be near marketplaces, accessible roads, and other amenities.
The Size of Your Budget
Acquiring a triple net building is usually a capital-intensive venture, so make sure your finances are in order. Commercial buildings are typically more expensive than residential ones due to their location, resources, size, and other factors.
Also, it’d help if you’ve decided whether you require a mortgage or a real estate loan while preparing your budget plan.
A Real Estate Agent’s Expertise
To prevent making costly mistakes, it’s typically a good idea to obtain professional advice and guidance before purchasing NNN Hobby Lobby real estate for sale. If you’re new to the property market, you might want to hire a realtor to help you navigate the process.
A real estate professional can explain real estate jargon and assist you in finding the best triple net offers available. In addition, if you have any queries or concerns about a property, the real estate agents can give you relevant information.
Although you can browse for properties on your own, having the help of an expert can help you avoid complications in the future.
Who Will Manage the Business?
Another consideration is your prospective role in the property’s management. If you work a day job, purchasing a triple-net building may be the best option because it requires a minimum amount of time and effort on your behalf.
Calculate the Potential Return on Investment
Purchasing a commercial building requires a thorough assessment of the property’s capacity to earn a profit.
You can use a real estate measurement technique like the one percent rule to assess the prospective earnings and losses of owning a NNN property.
The one percent rule can help you determine how much money you can make from a Hobby Lobby location.
Examine the Real Estate Laws in the Region
Another crucial factor to mull over before purchasing Hobby Lobby real estate for sale is the law or rule that governs the property you want to buy.
Failure to follow real estate standards often results in lawsuits, penalties, and fines. Therefore, you’ll need to become acquainted with all the regulations governing the areas in which you’re interested.
Hobby Lobby NNN properties offer potential landlords lots of fantastic opportunities to work with a reputable brand, expand, earn passive income, etcetera.
Since Hobby Lobby doesn’t sell franchises, you can make use of their NNN leasing policy. However, before making payments, ensure that you understand how NNN investments work.