What Is An Investment Grade Tenant
It is the large national companies that issue public bonds are the ones that are also given credit rating. This is the counterpart of a credit store. You will be able to see a number of different agencies that provides the credit rating of the corporation.
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. It is by not reaching the former rating that the credit rating that you will get with your company is a non-investment grade. The credit that you have once you will get an investment grade rating is that it has a lower chance for it not to get paid. The financial status of every company is being checked once in a while by the agencies that provide the ratings that is why the ratings will change over time as well.
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.
One sure fact the moment you have a credit tenement that leases your property is that you will get the monthly payment every time if you are there of the property. Once there will be credit tenants that lease your property, the building that you own will have a higher property value. It is this advantage that you will get the moment that your credit tenants will have a long-term lease on your property. It is when a triple net lease is made that the owner of the building will get additional benefit as the tenant will cover the insurance, operating expenses, taxes of the property. Without thinking much of the landlord, the tenant will have better control on the property. 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. There is an investor guide that will take help you in completing the exchange.
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. The length of the lease is the one that will match the loan term. It is the tenant that will be responsible for all of the factors involved and not the landlord.
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