Figuring Out Tips
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. There are several agencies that determine the rating of each company.
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. You will probably get a non-investment grade the moment that the rating will not reach the former. 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.
There are a number of big and medium size companies that are already having an investment grade rating. It is the tenants that made the lease that are called as credit tenants and when they lease a property, referred to as a credit lease.
As the businesses continues if the credit tenants, the owner if the building, on the other hand, will enjoy being paid every month for the rent of his building and that is a sure fact. It is when you have a credit tenant in your building that the property value of it will increase as well. If the credit tenants have a long term lease, then you can definitely get this advantage. 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.
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. In completing the exchange, there will be an investor’s guide.
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 coverage of this factor is under 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.