Crucial Facts You Need To Know About Investment Grade Tenants
It is the large national companies that issue public bonds are the ones that are also given credit rating. Some have credit store and this s its counterpart. There are several agencies that determine the rating of each company.
In a credit rating, you will be able to see two categories. The moment that the credit rating has a BBB or Baa3 rating then your company is considered as an investment grade rating. The moment that it will not get pass this rating then it is considered as not investment grade. The moment that you are rated as an investment grade company, the is a very low chance that you will not be able to pay out the credit that you have. It is the agencies that give out the rating that constantly checks the financial status of every company and the rating will change over time.
An investment grade rating has already been given to a number of different big companies as well as medium-sized companies. The moment that these companies will lease a property, then it is called as credit lease and the tenants that leased the property is called as credit tenants.
The moment that the owner of the building will have credit tenants, then he will be ensured that he will get the payment every time as the business continues. It is when you have a credit tenant in your building that the property value of it will increase as well. It is this advantage that you will get the moment that your credit tenants will have a long-term lease on your property. An added benefit to the owner of the building which is called as a triple net lease is when a tenant will handle the insurance, operating expenses, taxes of the property. There will be better control of the property on the side of the tenant without thinking much of the landlord. But the landlord must also know that this set up will have lower rent.
If you are a building owner, it is important that you will consider the credit strength of the tenant that will lease your property. When it comes it your investment property, the bank will make sure that they will check your credit score before they will proceed in lending you money. You have to make sure that this exchange will not be difficult. In completing the exchange, there will be an investor’s guide.
It is because the institutional investors that will provide the credit-tenant financing, they will not be liable to any landlord. The reason for this is because of the triple net terms. It is the loan term that will also match the length of the lease. The responsibilities will be carried out by the tenant and not the landlord.