Single Tenant Triple Net Lease Guide: NNN Structure, Credit Tenants & 1031 Rules

Single tenant triple net (NNN) leases are the gold standard for passive, credit-backed real estate income. In an NNN structure, the tenant — often a national credit tenant like Walgreens, McDonald's, or Amazon — pays base rent plus the property's taxes, insurance, and maintenance, shifting nearly all operational burden away from the landlord. At Skylatus, we don't treat these as "set and forget" assets. A triple net lease is a credit-backed financial instrument, and understanding its structure is the difference between a high-performing acquisition and a maintenance nightmare.

At Skylatus Property Capital, we help sponsors structure debt for single tenant NNN acquisitions, 1031 exchanges, and broader net lease portfolios nationwide.

What Is a Triple Net (NNN) Lease?

To understand a single tenant triple net lease, you have to look past the real estate and focus on the credit of the occupant. In its purest form, a triple net lease is a lease structure where the tenant agrees to pay all the expenses of the property in addition to their base rent.

Unlike a gross lease, where the landlord handles the operating costs, the NNN structure shifts the operational burden almost entirely to the tenant. In many cases, these are absolute net leases, often referred to as "bondable" leases. In an absolute net scenario, the tenant is responsible for everything — including the roof and structure — leaving the landlord with essentially zero management responsibilities.

The Power of the Credit Tenant

The value of an NNN property isn't just the dirt; it's the lease. When you have a tenant with an investment-grade credit rating, the lease becomes what's often called a "bond wrapped in real estate." This allows for superior financing terms, as lenders view the cash flow durability of a credit tenant lease as near-sovereign risk.

Landlord vs. Tenant Responsibilities

The biggest misconception in the NNN space is that all "net" leases are created equal. Sponsors frequently misunderstand which party is responsible for operating expenses because they haven't read the fine print. In a lease, a landlord should pay close attention to which party is responsible for each of the following:

• Property Taxes: The tenant sometimes pays these directly to the municipality, or reimburses the landlord.
• Insurance: Covers casualty, liability, and often rent loss (business interruption) insurance.
• Common Area Maintenance (CAM): Everything from landscaping to parking lot restriping.
• Utilities: Electricity, water, and similar operating costs.

In a standard NNN lease, the landlord is typically still responsible for the roof and structure. In an absolute net lease, even these become the tenant's responsibility.

Comparing NNN, Double Net, and Absolute Net Leases

Not all "net" leases are structured the same way. The table below breaks down how responsibility typically shifts across the most common structures.

Pros & Cons for Investors

Investors flock to single tenant triple net leases for the "mailbox money" lifestyle, but you must weigh the yield against the concentration risk.

1031 Exchange Rules: The NNN Connection

The single tenant triple net lease is a common destination for a 1031 exchange. If you are selling a high-maintenance multifamily asset or a piece of land and want to defer capital gains taxes, NNN is one of the most common landing spots.

• 45-Day Identification: You have 45 days from the sale of your relinquished property to identify your NNN replacement.
• 180-Day Closing: You must close on the NNN asset within 180 days of selling your relinquished property.
• Like-Kind Requirement: Almost any investment real estate qualifies as like-kind for an NNN asset.
• Debt Replacement: To fully defer taxes, you must replace the value of the debt you had on the previous property.

At Skylatus, we specialize in the debt replacement side of the 1031. We help sponsors identify the right leverage that satisfies IRS requirements while maximizing the cash-on-cash return of the new NNN acquisition. For a broader look at how debt fits into these structures, see our guide to types of capital.

Why Sponsors Use Skylatus for NNN Debt

The value of a single tenant triple net lease is found in the intersection of real estate quality, tenant credit, and debt structure. Getting that structure wrong — or working with a lender who doesn't understand how to underwrite credit tenant risk — can quietly erode the return that made the deal attractive in the first place.

Skylatus runs a competitive process across 10,000+ capital sources to find the lender best suited to a credit-tenant NNN acquisition, negotiates the terms, and manages the process through closing — whether the assignment is a standalone NNN purchase or the debt-replacement side of a 1031 exchange.

If you are looking at an NNN acquisition, don't just look at the cap rate. Look at the exit cap, the replacement cost, and the durability of the credit.