MERGING THE CREDIT QUALITY AND LONG-TERM STABILITY OF A COMMERCIAL
Investors seeking stable yields are attracted to commercial net leases because they offer predictable income from tenants while reducing expense uncertainties as real estate owners. In the same vein, Capview Partners developed the residential net lease so that investors have access to the predictability of a commercial net lease while owning single-family rentals. Through Capview’s relationship with Residential Net Lease, LLC, (RNL) our investors benefit from a 15-year absolute net lease backed by the income and reserves generated from all of RNL’s leases. Our aim is to improve income stability for investors by leasing homes to one commercial tenant, thereby eliminating the need for investors to shoulder the burdens of time, expertise and costs that go into managing SFRs.
With a history steeped in net lease real estate investments, we developed the Residential Net Lease (RNL) asset class. An RNL asset combines the improved credit, long-term stability, and zero landlord responsibilities of the commercial net lease with the growth, stability and durability of SFRs.
HOW DOES RESIDENTIAL NET LEASE ADD VALUE?
In the same way a 15-year lease to 7-Eleven adds value to a retail property, a 15-year lease with Residential Net Lease, LLC may add value to rental homes. This is due to increased net operating income from long-term and fixed lease payments, better tenant credit, and greater predictability of net income. These characteristics often attract a larger pool of buyers and increased valuations.
OUR INNOVATIVE APPROACH MAY BENEFIT INVESTORS IN THE FOLLOWING WAYS:
The Empire State Building operates under a 114-year net lease agreement, also known as a master lease. Each month, a contracted amount of rent is collected and paid to the property owner. The master lease agreement stays in effect through ownership transfer and regardless of the current occupancy or operation of the tenants in the 102-story skyscraper. Through the master lease agreement, the owners of the building opted for a stable and passive yield over the business of actively managing the building.
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