NNN Properties For Sale in Alaska
| Triple Net Properties in Alaska Overview | |
| State population | 733,406 |
| Number of business entities | 74,000+ |
| Average NNN lease property cost | $1.9M |
| Average cap rate | 5% - 7% |
| Corporate income tax rate | 0% - 9.4% (graduated rate) |
| Personal income tax rate | 0% |
| Capital gains tax rate | 0% |
Alaska offers NNN lease investors a highly favorable tax environment with a stable population. Nicknamed “The Last Frontier,” Alaska has no personal income tax and no capital gains tax – plus, its corporate income tax is assessed on a graduated scale that starts at 0%. With these business-friendly tax rules, Alaska is ranked #1 as the state with the lowest tax burden.
Common NNN Lease Tenants in Alaska
Common NNN properties for sale in Alaska include tenants from top NNN lease investments available across the whole United States. For example, Alaska NNN leases fall into categories such as…
- Fast food chains (Starbucks, McDonald’s, Burger King)
- Pharmacies (CVS, Walgreens)
- Gas stations (Tesoro, Chevron)
- Grocery stores (Fred Meyer, Kroger, Carrs)
- Retail giants (Walmart, Target)
What Types of Net Leases Are Common in Alaska?
In terms of net leases, there are three tiers: single net lease (N), double net lease (NN), and triple net lease (NNN). With each level, commercial real estate investors can pass additional expenses onto their tenants. So which type of net lease will you find most often in Alaska? In Alaska and beyond, you’ll see that single-tenant NNN leases are the most popular option when it comes to commercial real estate.
You might also see double net leases, or NN leases, for certain industrial parks or office spaces. Still, NNN properties are ideal for Alaskan real estate investors because they offer landlords the least amount of responsibility when compared with other types of net leases.
Under a single net (N) lease, the tenant pays for property taxes in addition to base rent. With a double net (NN) lease, the tenant will be on the hook for base rent, property taxes, and insurance. A triple net (NNN) lease holds the tenant accountable for base rent, property taxes, insurance, and maintenance. As you can see, an NNN lease shifts the majority of responsibility from the landlord to the tenant, making it ideal for commercial real estate investors in Alaska who are seeking predictable, passive income without the headaches.
How Can You Secure Financing for an NNN Lease in Alaska?
Financing an NNN property in Alaska can be secured through a number of different channels and loan programs, which include traditional banks as well as lenders dedicated to handling commercial real estate transactions. When you’re looking for financing for a single-tenant NNN property, any lender will pay particular attention to the tenant in question, looking closely at their business model, net operating income (NOI), property quality, and lease details. Just like you, the lender wants to ensure they will get their money back in a timely fashion.
Most NNN properties are purchased with some amount of debt. In order to qualify for a commercial mortgage for your NNN property in Alaska, you’ll typically need a net worth of $1 million or more. You may also qualify if you can demonstrate that your annual income is over $200,000 – or $300,000 if you are married and file taxes jointly with your spouse. You’ll typically need to provide a down payment between 30% and 40% of the loan’s total value. Your credit score will also be a factor in determining if you are qualified to obtain debt.
Your best loan options will typically come from a federally insured bank or credit union. You might also choose a private lender – they can be more expensive to work with but can often operate faster if you’re under a time crunch.
Recently, federal interest rates for commercial mortgages have fallen between 5.55% and 6.88%. As long as you meet your lender’s requirements for a high-quality property and tenant, you should be able to get financing for an NNN lease in Alaska.
How to Evaluate a Net Lease for Sale in Alaska
When evaluating an NNN for sale in Alaska (or any other state, for that matter), you should consider factors such as property value, tenant strength, creditworthiness, and cap rate. As an example, let’s consider a hypothetical Walgreens NNN property for sale in Wasilla, Alaska.
This property is listed for about $10 million, which is above the average sale price for an NNN property in Alaska. However, the property offers large square footage, a prime corner lot in an ideal location with lots of daily traffic, and an excellent tenant. Walgreens is one of the largest drugstore chains in America and has a strong credit rating. The property’s 5.7% cap rate makes it less risky than most NNN properties for sale in Alaska, and you can still make a strong return.
With any NNN property, it is important to consider the tenant’s NOI (net operating income), longevity, and more. A property like this one, which is located near many other premier shopping options – Target, Michael’s, Burger King, and more – and has a strong tenant in place, stands out as a strong investment for a savvy NNN investor.
What Makes Alaska an Attractive State for an NNN Lease?
Alaska is a highly attractive state for an NNN lease due to its stable population and economic expansion – the state’s number of businesses has been growing by about 3% every year. A diversity of industries, including mining, transportation, warehouse, and real estate make Alaska a hotspot for business ventures. Plus, the extremely favorable tax environment and pro-business policies help Alaska stand out as an excellent place for NNN lease investors.
What are the pros saying? Here’s what Alaska’s Governor, Mike Dunleavy, said in his most recent State of the State Address: “We’re in competition for people, and that’s why we’re proposing policies this year to make Alaska the best place to live, have a family, and do business.”
In other words, Alaska is committed to continuing to develop its favorable business environment and is dedicated to policy decisions that will benefit businesses now and in the future. There’s no better time to invest in an NNN property in Alaska.
