Retail lenders already care about who is in the center and when leases roll. A single-tenant building narrows that question to one credit and one expiration. A pharmacy, a quick-service restaurant, or a dollar store on a long lease is a different loan from a multi-tenant strip with local shops. The parent page for centers, rollover, and the published Scottsdale retail card is Arizona retail. This page is the net-lease case only.
True NNN means the tenant pays the three operating costs: real estate taxes, insurance, and maintenance. Absolute net, when the documents actually say it, pushes still more obligations to the tenant, including some structural items. A modified gross or a lease where the owner pays taxes or insurance is not NNN. Sponsors lose weeks by sending a listing that says 'net' and a lease that says otherwise. Send the lease.
Buyers sometimes pick an Arizona single-tenant building as a replacement property in a 1031 exchange. The exchange deadline does not make the tenant credit better, and this office is not a qualified intermediary. Debt on a replacement property is described on Arizona 1031 financing. That page is not tax advice. Neither is this one.
Arizona commercial rental tax sits on top of the lease
The Arizona Department of Revenue says commercial leases are subject to county and city transaction privilege taxes. Its commercial-lease page lists rent, property-tax reimbursements, insurance reimbursements, and common-area maintenance among taxable income. Utility reimbursements are treated differently: A.R.S. 42-5069(D) says reimbursements to the lessor for utility service are deducted from the tax base. Five counties levy a county commercial-lease tax: Coconino, Gila, Maricopa, Pima, and Pinal. Cities vary. Some add a city tax and some do not tax commercial lease at all. AZDOR's address lookup is how you see the stack for a given building.
That matters to a lender because a 'net' rent is not automatically free and clear to the owner. If the lease does not pass the rental tax through, the tax is the landlord's cost and it reduces the income available for debt service. If the lease does pass it through, the tenant's extra payment may itself be in the tax base. We do not calculate the tax. A CPA and the Department of Revenue do. We need to know which way the lease points before anyone treats the rent as pure NOI.
What the lender actually reads
Remaining firm term, renewal options the lender will count, the tenant's credit, and any kick-out or co-tenancy clause. A short lease to a strong tenant can be harder than a long lease to a weaker one, and the reverse is also true. Personal property, franchise agreements, and a ground lease under the building are separate documents. The Block at Pima Center, the retail card already published for Scottsdale, is a multi-tenant ground-lease acquisition. It is not an example of a single-tenant net lease, and it is not moved onto this page.
Life companies and CMBS are the usual permanent conversation when the term and the credit are long enough. A bank may hold a smaller loan or an owner-user building that happens to be net leased to an affiliate. Bridge is for a dark store, a tenant transition, or a closing date the permanent lender cannot meet. We arrange those. We do not rank tenants, and we do not publish a cap rate for Arizona net-lease property. Cap rates go stale and they are not a loan.
True NNN versus a lease that still bills the owner
The label in a listing is not the lease. Lenders underwrite the lease.
| True triple net | Owner still pays operating costs | |
|---|---|---|
| Taxes, insurance, maintenance | Tenant pays | Owner pays some or all |
| NOI starting point | Closer to contract rent, after any tax the lease does not pass through | Rent minus the expenses the owner kept |
| Arizona rental tax | Still a landlord question unless the lease passes it through | Still a landlord question, plus the expenses |
Sources that sometimes finance an Arizona net-lease building
| Source | When it fits |
|---|---|
| Life Company | A long single-tenant lease the insurance company will read as a permanent hold. |
| CMBS | When the term is long enough for conduit debt and the owner can live with that prepay. |
| Bank | A smaller net-lease loan, or an owner-user building, that a portfolio lender will hold. |
| Bridge & Private | A dark box or a tenant change, with a permanent takeout named rather than assumed. |