What 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. It is the one that is considered 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.
There are basically two categories when it comes to the credit ratings. The company that you have will have an investment grade rating the moment that it will have a BBB or Baa3 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 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. There will be a change of the ratings over time due to the fact that then agencies that provide the ratings always checks the financial status of every company.
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. There is a higher property value the moment that a credit tenants lease your building. 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. The tenets in the other hand will also have better control of the property without thinking much of the landlord. But the landlord must also know that this set up will have lower rent.
It is when you are a building owner that you should make sure that you will consider the credit strength of your tenant. 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. 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 the institutional investor that will provide the credit-tenant financing and they will not often have any obligations with regards to the 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. The responsibilities will be carried out by the tenant and not the landlord.