Mattress Firm

Location Shakopee, MN
Lease Term 10 Years
Acquisition Date Dec 2016
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Mattress Firm is located in Shakopee, Minnesota within the Minneapolis MSA. The Property is in a strong and growing traffic corridor with two major anchors along the   same road as the Property, Canterbury Park Racetrack and the 600-room Mystic Lake Casino & Hotel (both are the premier respective destinations in the State). Amazon is  opening a 1-million square foot fulfillment center (located ¼ mile west) by the end of 2016, producing 1,200 new jobs. The Property has strong access and visibility (Lowe’s  outparcel and located at the corner of the entrance into Lowe’s) and situated along the only connector road that provides access to the retail node. Within 5 miles of the  Property, the population is greater than 200,000. Traffic counts of 65,000 vehicles per day.

No. You are investing in NADG NNN REIT I that has purchased this building, which is leased to the tenant Mattress Firm.

That is correct. You as an investor own a share of the Fund that owns this building.

A triple net lease (triple–Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three “nets”) on the property in addition to any normal fees that are expected under the agreement (rent, utilities, etc.)

  • The tenant is able to effectively control their real estate
  • The landlord’s investment is passive, and the tenant absorbs increases in operating expenses (real estate taxes, capital repairs, etc.)
  • The tenants are normally willing to sign longer term leases (10-20 years)

A building lot separated or separable from a commercial development, the selling of which provides liquidity for the developer.

Yes you can as freestanding building are separately platted parcels. This is extremely advantageous to both the tenants and owners.

  • High demand from tenants.  This demand remains strong as newer types of retailers have emerged and compete for the prime visibility and easy access (Urgent Care Centers and ER Centers, Dental Care, Wireless Carrier Stores).
  • Tenants desire the visibility as well as the control over their real estate.  The building and signage reflects the retailers brand and image.  Whereas in a shopping center a retailer would only get to put up a sign on the building, in a freestanding building the entire building is designed by the retailer.  High visibility builds brands.

Why is the renewal rate on leases so high in the NNN retail asset class?

  • Majority of NNN retailers are national or regional tenants that have meticulous site selection criteria models (they know where they want to be which is why they sign the longer term leases and invest in their properties the way they do)
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