Why Billionaires love triple net leases (and you should too)
Introduction: The Simplest Deals Are Often the Smartest
When most people think about how billionaires build wealth, their minds immediately go to flashy assets: tech stocks, venture capital, high-rise development deals. But if you take a closer look at the real estate portfolios of the wealthiest investors in the world, you’ll find something much quieter—and much more consistent: triple net lease (NNN) properties.
These aren’t the kind of investments that make headlines. There’s no groundbreaking ceremony, no luxury branding, no splashy marketing campaign. But there is one thing that NNNs provide that every savvy investor—from first-time buyers to multigenerational family offices—is looking for: predictable, passive income with minimal responsibility.
Private investors, business owners, and high-net-worth clients all across the Southeast use this strategy to preserve capital, reduce risk, and simplify their real estate operations. Triple net leases are as close to hands-off as it gets in commercial real estate. And in markets like Nashville—where growth is strong and tenant demand is steady—NNNs are more relevant than ever.
In this post, we’ll break down exactly why triple net leases have become a cornerstone of billionaire portfolios, and how you can use them to build steady, low-maintenance wealth. We’ll cover how the lease structure works, what types of tenants make these investments so reliable, and how to think about your exit when it’s time to reposition or trade up.
What is a triple net lease?
Before we get into why high-net-worth investors love triple net leases, let’s define what they actually are—and why they’re so different from traditional lease structures.
In a triple net lease (NNN), the tenant agrees to pay three main operating expenses on top of their base rent:
Property Taxes
Insurance Premiums
Property Maintenance
That means as the landlord, you’re not footing the bill for leaky roofs, rising insurance rates, or surprise tax assessments. The tenant takes on the bulk of day-to-day responsibilities—you simply collect rent.
📊 NNN vs. Gross and Modified Gross Leases
To really understand the NNN structure, it helps to compare it with other common lease types:
1. Gross Lease
Landlord Pays:
Property taxes
Insurance
Maintenance
Tenant Pays:
Base rent only
Typical Use Case:
Office buildings
Short-term or full-service leases
2. Modified Gross Lease
Landlord Pays:
Some shared costs (varies by lease)
Tenant Pays:
Base rent
Partial share of operating expenses (negotiated)
Typical Use Case:
Multi-tenant office or flex properties
Creative or industrial spaces
3. Triple Net (NNN) Lease
Landlord Pays:
Minimal (often just structural repairs or roof/parking, if anything)
Tenant Pays:
Base rent
Property taxes
Insurance
Maintenance (all three “nets”)
Typical Use Case:
Freestanding retail
Single-tenant buildings
Corporate-backed long-term leases
A well-structured NNN lease removes much of the unpredictability and operational stress that comes with being a landlord. And for investors focused on income preservation and risk reduction, that’s exactly the appeal.
🔁 Lease Length and Rent Escalations
Triple net leases are typically long-term—10 to 25 years is common, often with multiple five-year renewal options built in. These leases also usually include annual rent escalations tied to inflation or a fixed percentage (e.g., 1.5%–3% per year).
That means your income increases gradually over time, helping you keep pace with rising costs and boosting the property's resale value.
🏢 Where You’ll See NNNs in Action
Most NNN leases are found in single-tenant, freestanding properties—think Starbucks, Walgreens, or FedEx. These tenants want control over their space, brand presence, and building systems. In return, they’re happy to take on the associated costs—because it’s still cheaper than building from scratch or paying CAM charges in a multi-tenant environment.
NNNs also appear in retail pad sites, corporate office campuses, and even industrial logistics hubs—anywhere the tenant needs autonomy and the landlord wants reliability.
In short, a triple net lease is about alignment. The tenant gets the control they want, and the landlord gets consistent, low-maintenance income. That’s why the world’s wealthiest investors allocate a portion of their portfolios to these kinds of deals.
Next, we’ll explore the exact reasons why this lease structure is so attractive—especially when you’re focused on passive income and time freedom.
Predictable Passive Income with Minimal Landlord Responsibility
If there’s one reason billionaires keep triple net leases in their portfolios, it’s this: they provide stable, predictable income without the headaches. And for investors who value their time—or have dozens of other deals in motion—that’s a major advantage.
A well-located, well-leased NNN property is about as close as it gets to set-it-and-forget-it in commercial real estate. You’re not fielding maintenance calls. You’re not negotiating annual CAM reconciliations. You’re not stuck managing a roster of small tenants with overlapping lease expirations.
💵 What Predictable Income Really Looks Like
With most NNN properties, you’ll see:
Monthly base rent deposited directly, usually with automatic escalations
Fixed annual increases (2–3% is common or tied to CPI)
Zero exposure to variable operating costs
That means rising property taxes? Covered.
Insurance premiums going up? Covered.
HVAC repair or roofing issues? Also covered—by the tenant.
This kind of expense pass-through structure is exactly why institutional capital has piled into the NNN space in recent years. It's a consistent, cash-flowing asset that performs well even when other sectors are experiencing volatility.
🧘♂️ Stress-Free Ownership for Busy Investors
If you’re an investor who’s already operating multiple buildings—or you’re running a business full time—you know how valuable your time is.
Unlike multifamily or multi-tenant retail, where you’re constantly handling turnovers, negotiating new leases, or upgrading common areas, a NNN lease shifts those burdens to the tenant. The landlord’s job becomes incredibly simple:
Collect rent
Monitor lease compliance
Handle financing, accounting, and long-term planning
That’s it.
You can own a portfolio of NNN properties across multiple states and manage it all from a laptop. In fact, many NNN investors do just that—with no property manager, no maintenance crew, and no emergency phone calls.
🧠 It’s Not Just Passive—It’s Strategic
Passive income is great. But what makes triple net truly powerful is how predictable that income is.
If you’re using real estate as a retirement vehicle, legacy asset, or a 1031 exchange target, this kind of stability gives you confidence. You can plan around it. Finance off of it. Scale with it.
That’s why you’ll often see NNNs in:
Estate planning portfolios
Trust-owned assets
1031 exchange rollovers
Institutional REIT holdings
The cash flow doesn’t just support your lifestyle—it supports your strategy.
In the next section, we’ll break down the types of tenants that make these leases so reliable—and why picking the right tenant is the difference between a true passive investment and a risky gamble.
Ideal Tenant Profiles: Credit + Stability
When you invest in a triple net lease, you’re not just buying a piece of real estate—you’re entering into a long-term relationship with a tenant. That tenant’s financial strength, operational model, and lease structure directly impact the value and performance of your investment.
In fact, one of the biggest factors that separates a high-performing NNN property from an underwhelming one is who’s on the lease.
🧠 What Makes a Strong NNN Tenant?
While asset class and location matter, tenant quality is what drives long-term stability and resale potential. A reliable NNN tenant typically has:
A long operational history with proven profitability
Strong financials, often including audited statements or publicly available reports
A corporate or parent company guarantee, rather than a single-location operator
An essential service model—something people need in any market cycle
The ability to sign a long lease—often 10+ years—with built-in escalations and renewal options
These traits reduce default risk, minimize turnover, and support property appreciation.
📊 Creditworthiness = Confidence
High-credit tenants give you something priceless in commercial real estate: predictability. You can underwrite more confidently, secure better financing, and attract more buyer interest at exit. Lenders are more likely to offer favorable terms when they see a solid lease backed by a credit-rated entity.
Even if the yield on a high-credit tenant is slightly lower than a local operator, the reduced risk and maintenance requirements make it a better long-term play for many investors—especially those looking for passive income and wealth preservation.
🏗️ Structure Over Speculation
One of the biggest mistakes newer investors make in the NNN space is focusing too much on the rent amount and too little on the structure and substance of the lease. A flashy rent check from a shaky operator won’t mean much if the business folds or the lease can’t be enforced.
Always ask:
Who’s guaranteeing the lease?
How long is the lease term?
Are there rent escalations, renewal options, or co-tenancy clauses?
What happens if the tenant vacates early?
The more stable and enforceable the lease, the stronger your position—not just while you hold the asset, but when it’s time to sell.
Ultimately, a great NNN investment is less about the building and more about the tenant behind the lease. Get that part right, and everything else—from financing to resale—gets a whole lot easier.
Exit Strategy and Resale Value Considerations
One of the most underrated aspects of a strong triple net lease investment is how easy it is to exit strategically—on your terms. When you structure the deal right from day one, you’re not just setting yourself up for passive income—you’re also creating an asset that other investors want to buy.
In fact, many investors treat NNNs as capital preservation vehicles: hold for stable cash flow, then sell or 1031 into a larger asset when the timing is right.
But just like any exit, the key is positioning your property to maximize value. Here’s how to think about it.
⏳ Timing Matters—Especially Lease Term
Buyers (and lenders) place a premium on certainty—and that’s directly tied to how much lease term remains. The closer your lease is to expiration, the more questions arise:
Will the tenant renew?
What happens if they leave?
Is the rent above or below market?
For that reason, the ideal time to sell a NNN property is often when there are 7–10 years remaining on the primary lease term. That gives the buyer plenty of runway and reduces perceived risk.
If your lease is shorter, the value may be discounted—or buyers may insist on a lower price to account for re-leasing risk.
📈 Cap Rates and the Resale Equation
Triple net investments are typically sold based on cap rate—the relationship between the property’s net operating income (NOI) and its market value.
The stronger the tenant, the longer the lease term, and the better the location, the lower the cap rate (which means a higher sale price).
To boost resale value:
Negotiate rent escalations into your lease
Extend or renew the lease before listing the property
Ensure the tenant is in good standing with no defaults or late payments
These small tweaks can make a big impact on valuation—especially when selling to 1031 exchange buyers or institutions that prioritize stable income over upside.
🏦 Who’s Buying NNN Properties?
When it comes time to sell, you’re not limited to local investors. Triple net properties are in high demand among:
1031 exchange buyers looking to defer taxes and park capital
Private equity firms and REITs focused on income-producing portfolios
High-net-worth individuals and family offices seeking wealth preservation
If you’ve got a long-term lease with a reliable tenant, you’re not selling a property—you’re selling a bond-like income stream backed by real estate. That opens the door to a much wider (and more competitive) buyer pool.
🔁 Planning for the Trade-Up
Many experienced investors use NNN properties as part of a portfolio growth strategy:
Buy and hold for 5–10 years
Build equity while collecting rent
Execute a 1031 exchange into a larger or better-positioned asset
Repeat the process and scale into higher-value properties
This is how you move from owning a single tenant building to assembling a cash-flowing portfolio that grows tax-deferred—without hitting reset every time you sell.
When done right, triple net investments give you control at both ends of the deal: consistent income while you hold it, and strong demand when it’s time to exit. That’s why the smartest investors—at every level—continue to lean into this model.
Conclusion: The Wealth Behind the Simplicity
Triple net lease investments don’t come with flashy returns or big renovation stories—and that’s exactly why billionaires and institutional investors love them. They’re simple. They’re steady. And they’re one of the few ways to earn truly passive income in commercial real estate.
When you buy right, with the right tenant and lease structure in place, an NNN property gives you the freedom to step back from day-to-day management and let your money work for you. It’s not just about collecting rent—it’s about owning income, protected by long-term leases and backed by real businesses.
The best part? You don’t need to be a billionaire to invest like one. Whether you’re a first-time buyer looking to stabilize your portfolio or a seasoned investor seeking low-risk cash flow, triple net leases offer a proven path to durable, long-term wealth.
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When most people think about how billionaires build wealth, their minds immediately go to flashy assets: tech stocks, venture capital, high-rise development deals. But if you take a closer look at the real estate portfolios of the wealthiest investors in the world, you’ll find something much quieter—and much more consistent: triple net lease (NNN) properties.
These aren’t the kind of investments that make headlines. There’s no groundbreaking ceremony, no luxury branding, no splashy marketing campaign. But there is one thing that NNNs provide that every savvy investor—from first-time buyers to multigenerational family offices—is looking for: predictable, passive income with minimal responsibility.
Private investors, business owners, and high-net-worth clients all across the Southeast use this strategy to preserve capital, reduce risk, and simplify their real estate operations. Triple net leases are as close to hands-off as it gets in commercial real estate. And in markets like Nashville—where growth is strong and tenant demand is steady—NNNs are more relevant than ever.
In this post, we’ll break down exactly why triple net leases have become a cornerstone of billionaire portfolios, and how you can use them to build steady, low-maintenance wealth. We’ll cover how the lease structure works, what types of tenants make these investments so reliable, and how to think about your exit when it’s time to reposition or trade up.