📈 Should You Buy a Single Tenant Net Lease Property? Here’s What to Know 🧾

🏬 Single Tenant Net Lease Investments: Pros & Cons for CRE Investors 💡

April 17, 2025•2 min read

🏬 Single Tenant Net Lease Investments: Pros & Cons for CRE Investors 💡

📈 Should You Buy a Single Tenant Net Lease Property? Here’s What to Know 🧾

🏬 Single Tenant Net Lease Investments: Pros & Cons for CRE Investors 💡

Single Tenant Net Lease (STNL) properties are a popular option in commercial real estate—especially for investors looking for passive income with minimal management. But like any investment, they come with advantages and potential pitfalls. Here’s what you need to know before making your next move.

What Is a Single Tenant Net Lease?

In a STNL deal, a single tenant occupies the entire property, and the lease typically places responsibility for taxes, insurance, and maintenance on the tenant. These are often long-term leases with creditworthy national brands—think Walgreens, Dollar General, or AutoZone.

Pros of STNL Investments

✅ Predictable Cash Flow: Long-term leases with fixed rents create stability.
✅ Low Management: Tenants handle most operational expenses—great for out-of-state investors.
✅ Attractive to 1031 Buyers: These assets are turnkey and easy to acquire as replacement properties.
✅ National Tenant Credit: Many tenants are investment-grade businesses with strong track records.

Cons of STNL Investments

⚠️ Vacancy Risk: If the single tenant leaves, you’re 100% vacant until a new tenant is found.
⚠️ Limited Upside: Rent escalations are usually minimal and fixed.
⚠️ Lease Rollover Exposure: If the lease expires and the tenant doesn’t renew, re-leasing can be slow and costly.
⚠️ Market Sensitivity: Cap rates are sensitive to interest rates, location, and tenant financial strength.

How Our Brokerage Helps We help clients analyze the real value of a STNL deal—including location quality, lease terms, tenant credit, and future exit strategy. Whether you're new to STNL or diversifying your portfolio, we help identify the best deals and mitigate the biggest risks.

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Bill Rapp, CRE Broker

I am a Houston commercial broker, with residential experience, as well as a lending background. I have been in the real estate industry for 14 years and counting, and I have worked in many roles within the industry and each has given me a unique perspective of the industry as a whole. My dedication to clients is rooted in this industry knowledge, but also includes my desire to go the extra mile in networking to source off market opportunities for my clients. Me and my team at eXp Commercial have a cutting-edge technology package that gets the widest exposure for each transaction. eXp Commercial offers a nationwide network through which we can deliver the best exposure and professional advice to achieve our clients’ goals while also minimizing their risk. Clients appreciate my methodical method of discovery in our initial consultation. Through which we can get to know each other and their specific’s business’s needs and objectives on a granular level. Our processes help navigate each transaction and its potential pitfalls through to a successful outcome for our clients. It is my stated goal to provide our clients with extensive market analysis and expertise that fosters innovative solutions and rewarding commercial real estate opportunities.

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