Single-tenant net-lease retail properties (STNL) are a popular asset class for investors seeking to own commercial real estate without incurring substantial management responsibilities.
In a triple-net lease, the tenant pays the taxes and insurance on the property as well as most maintenance fees, while the owner generally covers structure-related costs, such as the roof.
STNL properties such as car washes, convenience stores, quick-service restaurants and auto service centers became more popular after the adoption of 100 percent bonus depreciation. These assets generally have a higher proportion of equipment and site improvements that qualify.
While bonus depreciation stepped down to 60 percent in 2024, tax reform earlier this year made 100 percent bonus depreciation permanent. Investors may be able to pair the return of this benefit with tax-deferred gains via a 1031 exchange.
Tenant quality is a major consideration because there is only one tenant at a
