Blog / Triple Net Property

This section features past triple net investment offering recommendations we've made.


National Oilwell Varco 2 DST

[This offering is fully subscribed. This is provided as an example of one of the offerings our affiliates have recommended to clients in the past.]

Description:

The property is located in northwest Houston, Texas. The tenant is National Oilwell Varco, LP which occupies the property 100% with a long term double-net lease. The lease is a 15 year term, with one 5 year renewal option and with rent bumps every 5 years, is guaranteed by National Oilwell Varco, LP. NOV, LP is owned by National Oilwell Varco, Inc., a national credit tenant with a S&P credit rating of A-. We recommended this investment to both 1031 and non-1031 investors to take advantage of higher income generated by this strong, investment-grade tenant.


Tax-Benefits:

The offering was structured as a Delaware Statutory Trust (DST) to allow investors to utilize the investment for a 1031 exchange. Depending on their investment basis when investing in the property, investors were able to utilize depreciation to defer taxes on a portion of the income derived from the property.


Goals:

  1. Consistent longer-term income backed by strong corporate credit.
  2. Significant tax-savings as a strong 1031 exchange option and as an option for income-tax deferral with depreciation.
  3. Potential long-term upside for a sale or increase in income based on the value of the income provided by the rent increases in the lease.


Status:

This property continues to perform exactly as expected, providing steady, monthly income just as projected. Individual investors in the program have also been able to derive income-tax deferral due to the normal depreciation allowance for commercial real estate.


Cash Flow Return:

Year2010201120122013
Projected7.20%7.20%7.20%9.36%
Actual7.20%7.20%7.20%9.36%
Variance0.00%0.00%0.00%0.00%


 Total Return:

TBD – Not Yet Full Cycle


[Past performance does not guarantee future results. This offering’s results are not necessarily indicative of future recommended offerings. Real Estate Investing is subject to risk, including, but not limited to potential disruptions in cash flow, loss of principal, illiquidity, etc.]

 

Written By: Staff




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