Alternatives to Triple Net Lease
March 11, 2025
by a searcher from Rice University - Jesse H. Jones Graduate School of Business in Houston, TX, USA
Hi all - looking for some creative options/thoughts for moving the physical address of our business.
Our current landlord is under agreement to sell the real estate where our SMB is currently located. Prospective buyers want us to sign a 5 year NNN lease which we aren't looking to do for a number of reasons. Ideally, we'd like to purchase the real estate for the new address as opposed to renting elsewhere. Looking for some creative ideas on how to make that happen from the community. What are SBA options for real estate purchase? Anything we should specifically be looking out for?
Thoughts I've had:
1.) Purchase a turnkey warehouse outright - easiest, most straight forward option
2.) Buy a piece of land and build out a basic warehouse with a small carveout (~1000 sq ft) for and office
3.) Creative rental agreement with a new landlord
Looking forward to hearing what others have done.
Thanks
from Rice University in Houston, TX, USA
1.) Yes, currently have SBA with business. I don't foresee any issues with qualifying for other options.
2.) Yes we're growing but current space could support us for at least another year. No immediate need to increase office footprint.
3.) I understand but as a landlord myself elsewhere and with our growth, prefer not to lock our business into that structure.
4.) Haven't spoken with commercial broker but from my view, appears to be a lessor market for what we need. Reached out to agents for a couple of properties on market and both came back with offers at or cheaper than what we're currently paying (not by much; negligible)
5.) As a real estate investor, this is where my heart is leaning. Comes with time and risk but I think this is best long term solution. Yes, we have capital to build. Need to find right location.
Thanks
in New York, NY, USA
Could go the conventional route also since there's nothing lenders love more than real estate collateral. There are sometimes non-recourse options but they'll typically be more expensive.
These programs can be used to finance a new buildout, but its obviously much easier to find an existing property that's ready to go.
Happy to discuss further on an intro call as we have over 70 of the most active SBA lenders, along with 100+ other real estate lenders on our CapFlow platform. Feel free to ping me at redacted and we can set it up.