A tenant's credit rating plays a key role when evaluating a net lease property. High credit tenants such as Walgreens, CVS and McDonald's have for a long time been the gold standard of the net lease community. Likewise, national bank tenants like BB&T and PNC have always been viewed as secure investments. This security is paramount to many net lease investors, who often intend on the income stream generated to bolster a retirement or leave to an heir. For this reason, credit ratings have been the quickest and easiest way of assessing the secuirty of the tenant.
However, there are many unrated tenants which are almost considered to be de-facto credit worthy. Tenants like Wawa and Chic-fil-A, which are both private, draw heavy investor interest and can trade at cap rates as low as high credit rated tenants. It's important to have as much information about potential investment options as possible.
To view current credit ratings & metrics for both rated and unrated net lease tenants, check out our Quarterly Credit Rating Report.
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
