A bondable lease is a sub-variant of the popular single-tenant net lease. These are, as the name partially implies, leased to a single tenant on a net basis, which means the tenant is responsible for a portion or all of the taxes involved, including maintenance costs and insurance fees for the property. 

In most cases, these leases are triple net, which means that the tenant is responsible for all operating expenses. The leases are, in most cases, long-term – from ten to 25 years and are often behind famous names like McDonald's and Starbucks.

As you can see, most of what's involved in these net leases is extremely beneficial for the owner. They are already proving to be worthwhile investments for all landlords and real estate investors. 

However, there’s more to it:

The Many Benefits of Bondable Leases

Triple net or NNN leases have a wide set of benefits:

They boast relatively high liquidity as there is an extensive investor network behind these leases, including numerous big names, besides the one we already mentioned.

They have reasonably high entry price points. One would expect that NNN leases are incredibly costly as they bring forward many benefits. However, only properties behind large companies tend to trade at extremely high prices, while most other properties have entry prices as low as $500,000.

As a landlord of a NNN leased property, you have very few responsibilities. The leases are designed to put most of the responsibilities for the property in the tenant's hands, leaving the landlord to reap the benefits, without carrying the costs. 

Because NNN leases are long-term and given to a single tenant who can afford to pay for all the expenses, they represent one of the most stable and predictable cash flow assets for investors. 

In most cases, NNN leases are not backed by loans, but by the tenant’s credit. 

Now, it’s important to mention that these are all benefits of NNN leases, while bondable leases have even more. They are, essentially, the most extreme form of triple net leases, as they place not only all the costs on the shoulders of the tenant, but all the property-related risks as well.

That means that with bondable leases, you get the chance to reap the benefits of favorable rents without worrying about the costs or the risks that befall your property.

The tenant is the one who has to repair the roof and the structure when needed, and in the case of extreme damages, they are very likely to be required to rebuild the property or continue to make rental payments.

The Bottom Line

When you take a look at all of the benefits of triple net leases and their subset, the bondable triple net lease, you quickly conclude that it's extremely worthwhile to own them. 

Investors get to reap the benefits of high and stable rent, while the tenant is the one who cares for all property-related expenses and risks. 

All of this makes bondable lease investments very valuable to have. For more information, you may reach us at info@cbicommercial.com.