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. 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.
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. 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. 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. Once there will be credit tenants that lease your property, the building that you own will have a higher property value. It is this advantage that you will get the moment that your credit tenants will have a long-term lease on your property. 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. Without thinking much of the landlord, the tenant will have better control on the property. But the landlord must also know that this set up will have lower rent.
If you are a building owner, it is important that you will consider the credit strength of the tenant that will lease your property. 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.
With regards to the obligations to the landlords, the institutional investors is the one that will provide the credit-tenant financing. The coverage of this factor is under the triple net terms. It is the loan term that will also match the length of the lease. The responsibilities will be carried out by the tenant and not the landlord.
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