Our investment objective is to generate predictable, long-term net lease rental income with low volatility. We believe that single tenant net leased properties, such as the ones we acquire and own, are able to achieve these investment objectives for our portfolio because of the:
- long-term leases (typically 10-25 year initial terms) with investment grade or other creditworthy tenants, and
- triple and double net lease structures (the property owner is not subject to the potential risk of unexpected increases in real estate taxes, insurance premiums or maintenance expenses because the tenant is responsible for such items).
We plan to achieve our portfolio investment objective of generating rental income by taking the following investment approach.
- First, we intend to build a portfolio of income-producing net lease real estate of which the rents are the obligations of S&P-rated investment grade tenants, or non-investment grade tenants that are deemed to be creditworthy.
- Second, since we plan to acquire properties with long-term leases having average remaining lease terms of approximately ten or more years. We expect that this will allow us to better withstand periods of economic uncertainty compared to properties with short-term leases.
- In addition, the net lease structure of the leases will allow us to pass through substantially all operating and capital expenses (i.e., taxes, insurance and maintenance) directly to our tenants. Commercial properties that are not subject to net leases are potentially subject to greater volatility in operating results due to unexpected increases in operating costs or unforeseen capital and repair expenses.
- Finally, we plan to acquire a portfolio of income-producing properties that will be diversified by geography, tenant, industry and property type. We also plan to acquire a variety of property types, including retail, healthcare, industrial / warehouse and office.
See our acquisition criteria for more information.