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 moment that the credit rating has a BBB or Baa3 rating then your company is considered as an investment grade rating. You will probably get a non-investment grade the moment that the rating will not reach the former. 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. 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. 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. 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. The tenets in the other hand will also have better control of the property without thinking much of the landlord. The moment that this setup is used, the rent will be much lower.
If you are a building owner, it is important that you will consider the credit strength of the tenant that will lease your property. It is when you have an investment property that the bank will also check the credit score that you have before they will be 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.
With regards to the obligations to the landlords, the institutional investors is the one that will provide the credit-tenant financing. The reason for this is because of the triple net terms. When it comes to the loan term, it will match the length of the lease. The responsibilities will be carried out by the tenant and not the landlord.