Triple Net (NNN) Cap Rate Calculator
Derive the cap rate and implied value of a triple-net leased property where the tenant pays taxes, insurance and maintenance.
- NNN Retail
- 6.4%
- Long-lease average
- NNN Industrial
- 6.0%
- Credit tenant
- NNN Medical
- 6.8%
- Specialty
Formula & Statutory Rule
Formula
cap_rate = NOI / price × 100
Statutory Rule
NNN: tenant_pays = {tax, insurance, maintenance}; landlord_expenses ≈ 0Regional Benchmark Reference
| Jurisdiction / Tier | Rate or Limit | Statutory Note |
|---|---|---|
| Retail | 6.4% | Long lease |
| Industrial | 6.0% | Credit |
| Medical | 6.8% | Specialty |
Frequently Asked Questions
What is a triple-net lease?
The tenant pays property tax, insurance and maintenance in addition to rent, so the landlord's expenses are minimal.
Why are NNN cap rates lower?
Because the tenant carries the expense risk, NNN assets trade at lower cap rates than gross-leased properties.
What is a credit tenant?
A tenant with an investment-grade credit rating, which lowers the perceived risk and the cap rate.
How long are NNN leases?
Typical initial terms run 10 to 25 years, often with scheduled rent escalations.