NNN Lease Analyzer
Triple-net rent, broker vs true cap, and rent coverage for single-tenant deals.
Check whether a single-tenant tenant can comfortably afford its rent as it escalates over the lease. Required: annual rent. Optional: tenant EBITDAR — add it for the rent-coverage read.
What's EBITDAR and how do I find it?
EBITDAR is earnings before interest, taxes, depreciation, amortization, and rent — the tenant's cash flow before paying rent. Take the tenant's EBITDA from their income statement and add the year's rent back: EBITDAR = EBITDA + rent. Full definition →
The fixed annual rent bump written into the lease (e.g. 2%/yr).
Enter the annual rent (and the tenant's EBITDAR) to see whether the tenant can cover its rent.
How it's calculated
Rent coverage = tenant EBITDAR ÷ annual rent — how many times the tenant's pre-rent cash flow covers the rent. Institutional net-lease buyers generally want 1.5–2.0×. Because rent escalates (year N rent = base × (1 + escalation)N−1) against a flat EBITDAR, coverage declines over the term — the chart plots that decline against the comfort band. This is a tenant-credit screen, distinct from DSCR (the property's NOI vs your loan payment — that's the DSCR calculator).
Pre-filled with a worked example — edit any field to run your own deal.
Built by LFO Capital's institutional CRE underwriting team · computed, not guessed — deterministic math, not an AI estimate · how we calculate →
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Frequently asked questions
What is a triple-net (NNN) lease?
A lease where the tenant pays the three "nets" — property taxes, insurance, and maintenance/CAM — on top of base rent, so the landlord collects rent closer to net with little day-to-day management. Single-tenant net-lease assets trade largely on the tenant's credit and the lease terms, not on operations.
What is rent coverage, and how does it differ from DSCR?
Rent coverage is the tenant's EBITDAR divided by the annual rent — how many times the tenant's earnings (before interest, taxes, depreciation, amortization, and rent) cover the rent it owes you. It measures the TENANT's ability to pay; institutional net-lease buyers want roughly 1.5–2.0×, and near or below 1.0× the rent consumes most of the tenant's cash flow. DSCR is a different metric on a different party — the property's NOI divided by YOUR annual loan payment — and has nothing to do with tenant earnings. (DSCR has its own calculator.)
How do rent escalators affect coverage and value?
Escalators — fixed annual bumps or CPI — grow the rent over the term, which raises total and average rent and supports a higher price. But against a flat tenant EBITDAR, rent coverage DECLINES year over year, so a long term with steep bumps steadily erodes the cushion. A flat lease loses ground to inflation, and above-market in-place rent can mark down at renewal — so the escalation structure is a real part of what you're buying.
How do you calculate NNN rent with annual escalations?
Grow the base rent each year by the escalator: Year N rent = base rent × (1 + escalator)^(N−1). A $700,000 rent at 3% escalators is about $811,000 by year 6. Total and average rent over the term rise with the bumps — but against flat tenant earnings, rent coverage falls each year, so model both the income and the coverage.
What is effective rent on a triple-net lease?
Effective rent is the average rent actually realized over the term after escalators and any free-rent or concessions — a truer comparison figure than the face (starting) rent. A lease with steep escalators has a higher effective rent than its starting rent suggests; one with months of free rent has a lower effective rent than its face rate.
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