How a Warehouse Became an NNN Lease Investment

A vacant warehouse may not look like a strong investment at first. However, the right location, property features, and lease structure can create an opportunity worth evaluating. In this episode of The Route, Jason and Abe share how Price Capital Group turned a vacant Fort Lauderdale warehouse into a triple net lease investment.

The episode also explores commercial property inspections, industrial zoning, cap rate analysis, and the importance of understanding an asset before making an investment decision.

Understanding the Triple Net Lease Structure

A triple net lease, commonly called an NNN lease, is a commercial lease agreement in which the tenant pays rent along with three major property expenses: real estate taxes, insurance, and maintenance.

This arrangement can reduce the owner’s day-to-day operating responsibilities. Instead of managing every expense directly, the property owner receives rental income while the tenant handles the costs assigned under the lease.

However, investors should always review the lease agreement carefully. Responsibilities can vary depending on the terms, especially when it comes to major structural repairs and building components.

For commercial property investors, understanding these responsibilities is an important part of evaluating a net lease opportunity.

Why Every Commercial Property Needs an Inspection

A property listing can provide useful information, but it cannot show everything about a building. Photos may hide maintenance problems, access restrictions, parking issues, or other conditions that affect an investment.

That is why the Price Capital Group team believes in visiting properties before making decisions.

During an inspection, investors should review the building’s condition, landscaping, parking areas, signage, access points, and potential safety concerns. These details can affect tenant satisfaction, maintenance costs, and the long-term performance of the property.

A proper site visit also helps investors compare the information provided by a seller or broker with the actual condition of the asset.

Evaluating a Property Beyond Its Location

In the episode, the team visits a property in Sea Ranch Lakes, where access restrictions prevent a traditional walkthrough. The location has private streets and controlled entry, making it difficult to inspect the property from the ground.

The team uses a drone to get a better view of the building and surrounding area.

This experience highlights an important part of commercial real estate due diligence. Investors should understand who controls property access, what restrictions may apply, and how those limitations could affect inspection and future operations.

Evaluating a property means looking beyond its address and asking practical questions about access, ownership, surrounding conditions, and exit options.

The Fort Lauderdale Warehouse Investment

One of the main examples in this episode is a Fort Lauderdale warehouse that Price Capital Group acquired in 2023.

At the time of acquisition, the building was vacant and in poor condition. It had no rental income, and its appearance did not immediately suggest a strong investment opportunity.

The team looked beyond the property’s condition and focused on its location and potential. After acquiring the warehouse, the property became an operating asset under a triple net lease arrangement.

This example demonstrates why investors should evaluate the fundamentals of a property rather than judging it only by its current appearance.

A vacant building may offer potential, but that potential must be supported by location, demand, property functionality, and a realistic plan for leasing and management.

How I-1 Zoning Creates Industrial Property Opportunities

Zoning can have a major impact on the uses permitted at an industrial property.

The Fort Lauderdale warehouse discussed in the episode has I-1 industrial zoning. One important feature is the ability to use outdoor storage, subject to applicable local regulations and property requirements.

Industrial outdoor storage can be valuable for businesses that need space for vehicles, equipment, materials, or other operational purposes.

For investors, zoning should be part of the property evaluation process. It is important to confirm permitted uses, restrictions, parking requirements, and any local approvals that may apply before assuming a particular use is allowed.

A building’s interior is only one part of its value. The land, yard space, access, and permitted uses can also influence its appeal to potential tenants.

Understanding Warehouse Cap Rate Analysis

Cap rate is one of the key measurements used in commercial real estate investment analysis. It helps investors compare a property’s annual net operating income with its purchase price.

The basic formula is:

Cap Rate = Net Operating Income ÷ Property Value × 100

For example, if a property generates $100,000 in annual net operating income and has a value of $1 million, its cap rate is 10%.

However, a cap rate should never be considered in isolation. Investors also need to evaluate the location, building condition, lease terms, tenant quality, operating expenses, and potential future costs.

The episode highlights why accurate numbers and an in-person property review are both important. A promising return on paper does not automatically make a property a good investment.

Property Management and Long-Term Performance

Acquiring a commercial property is only the beginning. Its long-term performance also depends on consistent property management.

The team discusses practical responsibilities such as handling maintenance requests, coordinating vendors, removing hazards, and keeping the property in good operating condition.

A clear maintenance process helps prevent small issues from becoming larger problems. It also supports tenant relationships and protects the physical condition of the asset.

Price Capital Group manages its properties internally, giving the team direct involvement in property operations and ongoing asset management.

Key Lessons from This Warehouse Investment

This episode offers several useful lessons for anyone evaluating an industrial property or NNN lease opportunity.

• Look beyond appearances: A vacant or poorly maintained building may still have investment potential.
• Visit the property: An in-person inspection can reveal details that photographs and listings may miss.
• Understand zoning: Permitted uses and outdoor storage options can influence tenant demand.
• Review the lease: Know which expenses and responsibilities belong to the tenant and which remain with the owner.
• Check the numbers: Evaluate net operating income, cap rate, expenses, and the property’s realistic value.
• Plan for operations: Long-term performance depends on active management and a reliable maintenance process.

The central lesson is simple: successful commercial property investing requires research, practical evaluation, and disciplined decision-making.

Watch The Route: Triple Net Lease Warehouse Deal

Watch Jason and Abe discuss the Sea Ranch Lakes property, the Fort Lauderdale warehouse acquisition, and the investment principles behind the deal.

Explore how Price Capital Group evaluates industrial properties, reviews lease structures, and approaches commercial real estate opportunities through real-world examples.

Follow The Route for more property tours, acquisition discussions, and commercial real estate investment insights.