Crucial Facts You Need To Know About Investment Grade Tenants
Any large national companies that issue public bonds are being given credit rating. This is the counterpart of a credit store. There are several agencies that determine the rating of each company.
When you are talking about credit rating, you will be able to see two kinds of categories. The rating of BBB to Baa3 is considered as an investment grade. The moment that it will not get pass this rating then it is considered as not investment grade. It is when you will get an investment grade rating that the credit that you have had a very low chance of it not getting 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.
For the large companies and medium-sized companies, there are already a large number of them that already got an investment grade rating. It is referred to as credit lease the moment that the company will lease a property and the tenants that made that lease possible is known as the 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. You can definitely get this especially if the lease that they have is a long term. 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. There will be better control of the property on the side of the tenant without thinking much of the landlord. The building will have a lower rent once this set up is used.
The tenant that will lease your property should be considered by you when you are the building owner. Before the bank lends you money, they will first check the credit score that you have especially for your investment property. It should be that the exchange will not be difficult. You can go and look the investor’s guide so that you will have the needed help.
It is because the institutional investors that will provide the credit-tenant financing, they will not be liable to any landlord. The coverage of this factor is under 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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