Are you in the market for a Mattress Firm NNN for sale? If so, you’re in luck! This article will provide you with all the information you need to make an informed decision.
Contents
Mattress Firm: Company Overview
Founded in 1986 and went public in 2016, Mattress Firm is one of the largest mattress retailers in the US. The company sells a variety of products, including traditional innerspring mattresses, memory foam mattresses, latex mattresses, and hybrids. They also sell box springs, bed frames, pillows, sheets, and other bedroom furniture.
Today, the company already has more than 3,000 locations in 33 states across the country, with a number of them put up for sale under triple net lease (NNN). The stores typically measure 10,000 square feet, sitting on 4/5 acre lots.
For investors, you can usually expect a 12-year initial lease term, with an average of 10% rental price bumps every five years for newly built properties.
Focused on rewarding every customer, the company expects upward growth to continue into the future. So, as an investor, there would be no better time for you to jump on the bandwagon and invest in a Mattress Firm NNN for sale than now.
What Is an NNN Property
An NNN property is a commercial property that is leased to a single tenant for an extended period of time (usually 10 years or more). The tenant is usually responsible for all repairs and maintenance on the property.
Investors who purchase these types of properties can expect to receive a stable, passive income for years to come. In addition, the value of an NNN property is often less affected by economic downturns than other commercial real estate investments.
Important Things to Look for in a Mattress Firm NNN Property
When looking to invest in NNN Mattress Firm stores, there are several things you’ll want to keep in mind.
Location
One of the most important things to look for in an NNN property is a good location. Ideally, it should be somewhere with high traffic and visibility. Make sure the surrounding area is conducive to retail businesses—there should be plenty of parking available and good foot traffic.
Size
As previously implied, Mattress Firm stores typically measure around 12,000 square feet, so make sure the potential property you’re considering is of a similar size.
It’s also important to check the zoning for the potential property. These stores are typically retail businesses, so make sure the zoning allows for this type of use.
Profit Margins
Make sure that the property you’re considering has healthy profit margins. Mattress Firm stores usually have average sales volumes of $850,000 per year, so it’s important to make sure that the rent you’re paying is not too high or too low in comparison.
Lease Terms
It’s also important to check the lease terms before making an offer on an NNN property. As mentioned earlier, these properties typically come with a 12-year initial lease term, with rental price bumps every five years.
Capitalization Rate (Cap Rate)
The cap rate is an important metric to consider when purchasing an NNN property. This number reflects the annual return on investment you can expect from the property.
As a general rule of thumb, you’ll want to purchase a property with a cap rate of 6% or above.
To determine the cap rate of a potential property, you can use this formula:
Cap Rate = Net Operating Income / Purchase Price
So, for example, if the annual net operating income of a property is $50,000 and the purchase price is $800,000, then the cap rate would be:
Cap Rate = 50,000 / 800,000 = 0.0625 or 6.25%
How to Find Mattress Firm NNN Properties
There are several ways you can go about finding Mattress Firm stores for sale.
One option is to use a commercial real estate brokerage firm. These firms have access to listings for all types of commercial properties, including the stores that you are looking for.
Another way is to search Google using the key phrase “Mattress Firm near me” or use online databases that contain information on millions of commercial properties across the country.
You can also contact local Mattress Firm store owners directly and ask if they are interested in selling their property.
Benefits of Owning an NNN Property
There are several benefits of owning a Mattress Firm real estate for sale. For starters, it allows you to:
- Enjoy fewer responsibilities as a landlord.
Since Mattress Firm will be responsible for all repairs and maintenance on the property, you don’t have to worry about anything except collecting rent checks each month.
- Earn stable passive income for long periods at a time.
The Mattress Firm lease agreement guarantees rental price bumps every five years, so you can be sure your income will continue to grow even if the economy takes a turn for the worse.
- Have a business that is less affected by economic downturns than other commercial real estate investments.
NNN properties are also a great investment during times of economic volatility. Because these types of investments are less affected by downturns than other commercial real estate investments, they can be a safer way to grow your portfolio.
- Ensure easy tenant retention.
Since Mattress Firm is a well-known and trusted brand, it’s unlikely that you’ll have to worry about retaining tenants for your property. As it is an established business, there will be a high possibility that the tenant renews the contract after each term ends.
- Expect good returns on investment.
As mentioned earlier, Mattress Firm properties typically come with a cap rate of at least six percent. This number is reflective of the annual return on investment you can expect from the property.
Final Thoughts
Purchasing a Mattress Firm NNN for sale can be a great way to invest in commercial real estate. However, like any other type of property, you have to observe some due diligence so you are buying one that will truly meet your investment goals.
By following the tips in this article, you can make sure that you’re making a wise investment choice and earning stable passive income for years to come!
For more information that you can use in managing your business and growing it, feel free to read the other articles on our site!
