1.1362-2(c) (5)(ii)(B) specifically states that significant services are not rendered and substantial costs are not incurred in connection with net leases
. Because Parks Square leases space only on a "net lease
" basis (and because Parks Square performs no significant services), it will be subject to the tax on PII.
The firm believes that well executed net leases
can provide a path to non-cyclical and consistent cash yield, generally in industries and companies that New Mountain already researches.
The properties are all subject to long-term triple net leases
In addition, generally, substantial costs are not incurred in connection with net leases
. However, in Letter Ruling 9404016, the Service held that rents from a net lease
of personal property were not deemed "passive investment income." The IRS determined that the taxpayer's large employee compensation and office rental expenses amounted to substantial costs even though the rental was a net lease
Adam English, Principal of STREAM, commented about the sale that "the seller was pleased with the attractive cap rate achieved for the properties and the buyer was pleased with acquiring Dollar General properties under long term triple net leases
located in strong markets.
Activities can be structured so that property under net leases
will be grouped together and property for which significant services are rendered will be grouped together, thus achieving different treatment for self-employment tax purposes.
The triple net leases
are all guaranteed by Alimentation Couche-Tard, an investment grade company rated by Standard & Poor's (BBB-).
Jimmy Goodman, Partner of The Boulder Group, added, “First time net lease
investors are seeking newer Dollar General leases, as they are 15 year triple net leases
as opposed to the older 10 year double net leases
Consistent with the net leases
for the office and retail components of the World Trade Center, the net lessees have that responsibility.
There are two primary types of leases when it comes to a discussion of escalations: Net leases
, in which the tenant is responsible for all operating and some or all capital costs; and Gross leases, in which the tenant is only responsible for increases in operating expenses above some predetermined base.
Carey and Extra Space Storage have entered into net lease
agreements for 36 self-storage properties owned by Carey.
Birmingham, AL, January 05, 2015 --(PR.com)-- STREAM Capital Partners ("STREAM"), a boutique net lease
and sale leaseback advisory group, recently advised the seller, a family office, on the sale of a portfolio of 18 KFC properties.