Triple Net (NNN Net) Lease Solutions
Paradigm Real Estate Group are experts in the Triple Net (NNN) lease market in the US and offer a unique platform that allows for complete customization of Single tenant investment grade commercial lease properties.
- Solid foundation of highly predictable income
- Investment in real assets with potential for capital appreciation
- All leases are with investment grade and accredited rated tenants
- Steady cash flow at higher yields with less risk than other traditional asset classes
- Inflation hedge with built-in rent increases and escalations
- Core focus & bias on sectors such as healthcare, auto related, logistics, deep value retail, supermarket, pharmacy and selective
- industries resilient to e-commmerce online trends
- Non-Recourse lending up to 75% Loan-to-Value (LTV)
- LLC/LLP structure for tax optimization and transparency to investor
Our Investment Model
- We combine careful tenant selection with detailed property analysis
- Skilled negotiation for property acquisition to yield higher returns than comparable public REIT’s
- Paradigm’s LLC/LLP structure provides US investors tax shielded current income with deferred capital gains to achieve substantially higher net income
- Extensive business & credit modeling and sector differentiation to select investment grade tenants to sustain lease payments for 10-20 years
- The Paradigm Platform utilizes a loan secured by a pledge of collateral – real property
- The investor is not personally liable – if the investor defaults, the lender can seize and sell the collateral, but if the collateral sells for less than the debt, the lender cannot seek that deficiency balance from the borrower—its recovery is limited only to the value of the collateral.
- While the borrower is in first loss position, the lender also assumes significant risk, so the lender must underwrite the loan with much more care than in a full recourse loan. This typically requires that the lender have significant domain expertise and financial modeling expertise.
- The non-recourse Loan is 10-year fixed-rate on a 30-year amortization schedule allowing the investor to capitalize on the current low interest rate environment.
- The non-recourse loan does not impact the investor’s credit or borrowing power.
- The General Partner negotiates and arranges non-recourse loan(s) with national banks, pension funds, insurance companies or other national lenders.
Benefits of Non-Recourse Lending
- Enhance your cash flow and total return
- Favorable lending up to 75% Loan-to-Value (LTV)
- Enhance Due Diligence – each property undergoes extensive credit and financial modeling by the lending institution
- Loan issued by national bank lender like Wells Fargo, UBS and Bank of America
Benefits of LLP structure
- Depreciation Expense: cost of building depreciated over 39 years
- Mortgage/ Interest
- Management Fees
- Other expenses
Passive Gains and Losses
Losses can be carried forward to offset gains from passive activities in future years, and can eventually be used to offset gain on sale, or against other active or passive activities when an investor terminates his ownership interest in the partnership.
All profits and losses flow directly to the individual limited partners