The Benchmark Net Lease Real Estate SCTR℠ Index measures the performance of Net Lease Real Estate Investment Trusts (REITs) which are equity REITs that own properties leased to single tenants under long-term, triple-net leases. Under a triple-net lease, the tenant is responsible for all operating expenses, property taxes, and insurance. Rent is paid to property owners “net” of these three primary expenses (“triple-net”) lease. Net Lease REITs also have minimal capital expenditures because the tenants are responsible for maintaining the properties. The properties are leased to tenants operating in a variety of industries and the portfolios are generally diversified geographically. Most invest in multiple property types including office, industrial, retail and entertainment.
Net Lease real estate REITs own properties which are leased primarily to single tenants who pay for maintenance expenses, property taxes, and insurance. These types of REITs tend to have highly predictable cash flow due to the lack of responsibility for most property costs and the long-term nature of the leases which typically have scheduled rent increases.
Net Lease properties represent critical locations for businesses including corporate headquarters, distribution centers, manufacturing facilities, as well as the properties companies need to generate revenue and profits such as drug stores, restaurants, health clubs, entertainment venues, etc.
The number of Net Lease REITs as well as the assets owned by these REITs has grown dramatically over the past decade as more and more operating companies are choosing to lease rather own their real estate.
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TOP 10 HOLDINGS
Top 10 Holdings
As of 08-17-2018
Benchmark Real Estate SCTR℠ proprietary holdings and performance history are provided upon request. SCTR℠ indices are protected through various intellectual property rights and unfair competition and misappropriation laws. In particular, Benchmark Investments has registered the “SCTR” “NNNL” and “SCTRs” service marks. Benchmark requires a license to launch any product whose performance is linked to the value of a particular SCTR℠ index, for example, derivatives, bonds, swaps and OTC products and for all use of the SCTR℠ name or name of the SCTR℠ index in the marketing of the product. See the Terms of Service for more information.
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|Benchmark Net Lease Real Estate SCTR℠ Index||NNNLSCTR||Total Return||NASDAQ|
NNNL Returns: Not All Real Estate is Created Equal
NNNL℠ Returns vs. Benchmark SCTRs℠ and FTSE Nareit Indexes demonstrate how each property type has its own set of investment characteristics, including individual economic cycles and risk factors, competition threats, and growth potential. Real Estate SCTRs℠ provide tailored solutions for commercial real estate investment management. There is significant dispersion of market multiples (Share Prices/Fund From Operations) and returns throughout the property sectors. SCTRs℠ give market participants direct access to the property class they desire.
Benchmark NNNL 1YR Percentage Returns
Benchmark NNNL 3YR Percentage Returns
Advantages of Real Estate SCTRs
Correlation and risk-adjusted return metrics demonstrate that listed equity real estate investment trusts provide optimal exposure to the real estate asset class.
Allows investors to take or adjust positions quickly and efficiently by buying and selling positions corresponding to the weights of all constituents which are traded on liquid public markets such as NYSE & Nasdaq.
Provides direct access to institutional office real estate diversified over many geographic areas and management teams without investing in properties or with a real estate equity managers
Portfolio Investment Thesis
Real Estate SCTRs℠ provide tailored solutions for commercial real estate investment management. Main drivers for each real estate SCTR℠:
- Market “cap rates”
- Supply/ demand conditions
- Competition from nearby properties
- Employment growth
- Consumer and business spending
- Interest rates
- Lease revenues
- Property expenses
- Occupancy rates
- Prevailing market rental rates
- Tenant quality and replacement cost