The 6%–7% cap rate, hands-off Miami real estate strategy that lets you collect rent while a corporate tenant pays the taxes, insurance, and maintenance.
Key Takeaways
- A Miami NNN deal transfers taxes, insurance and maintenance to the tenant — leaving the landlord with checks, not phone calls.
- Cap rates on credit-tenant NNN properties in Miami range 5.5%–7.2% in 2026, the highest spread in five years.
- For business owners selling a company, NNN is the 1031 exchange replacement strategy that requires zero operational involvement.
There's a category of Miami real estate buyer I meet maybe four times a year. They just sold a company. They're sitting on a check between $3 million and $20 million. They're already wealthy. And they have one very specific question: "Carlos, how do I put this money into real estate without becoming a landlord?"
The answer is almost always the same. Triple net lease. NNN. The strategy that turns a $5 million check into a $25,000-per-month income stream — and you never get a 2 a.m. call about a broken HVAC unit, because contractually, the tenant pays for it.
If you're a Miami business owner, a recent exit, or someone who has spent twenty years compounding W-2 income and is now ready to convert that energy into passive yield, this is the article you've been looking for.
What an NNN Lease Actually Is (And Why It's Different)
Most people who own rental real estate own a "gross lease" property. You collect rent. You pay the property taxes. You pay the insurance. You pay the maintenance and any structural repairs. You manage the tenant. You eat the vacancies.
A triple net lease — NNN — flips three of those expenses to the tenant:
- Net 1: Real Estate Taxes — Tenant pays the annual property tax bill directly.
- Net 2: Insurance — Tenant pays the building's insurance premium.
- Net 3: Maintenance — Tenant pays for everything from the roof down to the parking lot resurfacing.
Your only job as the landlord is to own the building, cash the rent check, and maintain the loan if you financed. That's it. No leasing agent. No property manager. No vendors. In the cleanest version of the deal, you don't even visit the property.
The trade-off is that NNN cap rates are lower than messier multifamily or value-add deals — typically 5.5%–7.2% in Miami right now — because you're paying for the passivity and the credit quality of the tenant.
Why Miami in 2026 Is a Strong NNN Window
Three things are converging right now that make Miami the most interesting NNN market in the Southeast:
1. Cap rate expansion is real. After three years of interest rate uncertainty, sellers of single-tenant NNN buildings in Miami have finally adjusted expectations. A Starbucks ground lease that traded at a 4.25% cap in 2022 is trading at 5.75% today. A Walgreens with 12 years remaining on the lease that was 5% is 6.25%. For a buyer with cash or low-leverage debt, this is a meaningful improvement in yield.
2. Florida's no-state-income-tax advantage stacks. NNN income is passive (well, mostly — talk to your CPA), and Florida doesn't touch it at the state level. Compare to a California or New York landlord, where 8%–13% of your rent disappears before you see it.
3. The Miami office and industrial market is splitting. As I covered in my article "Miami Office Rents Just Crossed $200/SqFt — Why Smart Business Owners Are Buying Instead of Renewing in 2026," Class A office is booming in Brickell. Meanwhile, suburban retail and industrial flex space — the bread and butter of NNN — is still pricing reasonably. The right NNN deal in Doral, Hialeah or Miami Gardens is meaningfully better than the same product in Atlanta or Tampa.
The Four Tenant Types Miami NNN Buyers Should Know
Not all NNN deals are the same. Here's the lineup:
### Investment-Grade Credit Tenant (5.5%–6.25% cap)
These are S&P-rated BBB+ or better corporate tenants signing long leases. Think Starbucks, McDonald's, Chase Bank, Walgreens, CVS, AutoZone, FedEx. The lease is essentially as creditworthy as a bond — the tenant is virtually guaranteed to pay. Cap rates are lowest, but so is risk.
A typical Miami deal: a 3,500 sq ft Starbucks with drive-thru on a busy Doral corner, 15 years remaining on the ground lease with 10% rent bumps every 5 years. $3.2M purchase price at a 5.75% cap = $184K/year in rent, paid quarterly, with the corporate Starbucks balance sheet behind it.
### Sub-Investment Grade National Tenant (6.25%–7.25% cap)
National brands without the BBB+ rating. Dollar General, Family Dollar, AutoZone in some markets, regional banks. Slightly higher risk, meaningfully higher yield.
### Strong Local/Regional Operator (7%–8.5% cap)
A multi-unit franchisee, a private medical group, a regional dental chain, a private school. The corporate guarantee isn't there, but the operator is well-capitalized and has been in business 15+ years. This is where many smart Miami NNN buyers fish because the yield premium is real if you can read the operator's financials.
### Single-Tenant Industrial/Flex (6.75%–8% cap)
A 25,000 sq ft warehouse leased to a logistics company. A flex space leased to a regional HVAC distributor. Less glamorous than retail, but Miami's industrial vacancy is under 4% and lease rates have been climbing for six straight years.
The 1031 Exchange Pairing That Makes NNN Powerful
This is where the strategy gets interesting for a Miami business owner who just sold a building, a business, or any appreciated asset.
A 1031 exchange lets you defer capital gains taxes when you sell investment real estate and reinvest in "like-kind" property. NNN properties are the single most popular 1031 exchange landing target for one reason: you can identify and close on them inside the strict 45-day identification and 180-day closing windows because the inspection is simple and the seller is motivated.
The typical sequence:
- 1You sell a Miami office building you owned for 15 years for $4M. You'd owe roughly $750K in federal capital gains and depreciation recapture taxes.
- 2Inside 45 days, you identify three NNN replacement properties.
- 3Inside 180 days, you close on one or two NNN deals totaling $4M (or more, with leverage).
- 4You owe zero tax. The new NNN property starts cash-flowing immediately, and the depreciation reset gives you another 39-year runway of tax-sheltered income.
For deeper context on the 1031 mechanics, my earlier piece "Depreciation and 1031 Exchanges: The Miami Real Estate Tax Strategy Your CPA Hasn't Fully Explained" breaks down the exact timing rules and qualified intermediary process.
- Miami Market Snapshot — June 2026:
- Median NNN cap rate (Miami investment-grade retail): 5.85% (up from 4.65% in 2022)
- Industrial vacancy rate: 3.9% (one of the lowest in the U.S.)
- Single-tenant retail trade volume YTD: $1.4B in Miami-Dade
- Average NNN lease term being sold today: 11.3 years remaining
The Three Mistakes I See Miami NNN Buyers Make
Twenty years in this market, and the same three mistakes show up over and over.
Mistake 1: Buying the cap rate, not the location. A 7.5% cap rate Dollar General on a road that lost two lanes of traffic to a bypass is going to be vacant in 2030 with no tenant to backfill. A 5.75% Starbucks on a corner that's getting denser every year is a 50-year asset. Always tour the location at three different times of day before signing.
Mistake 2: Skipping the lease audit. Not all "NNN" leases are actually NNN. Some have landlord-responsibility carve-outs for roof, parking, or HVAC over a certain age. Some have rent caps that destroy the inflation protection. A real-estate attorney who specializes in commercial leases — not your residential closing attorney — needs to read every word before closing.
Mistake 3: Over-leveraging. A 5.85% cap rate with a 7% interest rate loan at 70% LTV gives you negative leverage and zero cash flow. Most Miami NNN buyers in 2026 are either paying cash or borrowing at 45%–55% LTV. If your spreadsheet only works at 70%+ leverage, it doesn't work.
Frequently Asked Questions
Q: How much money do I need to start investing in Miami NNN real estate? A: Entry-level single-tenant NNN deals in Miami start around $1.5M for smaller QSR (quick-service restaurant) sites and go up. For institutional-quality deals with national tenants, plan on $3M–$8M of equity. Below $1.5M, you're typically looking at strip-mall pad sites or franchisee-operated deals with higher risk.
Q: Can I use a Miami NNN property in my self-directed IRA? A: Yes — and many of my clients do. NNN works particularly well in a self-directed IRA because there's no operational involvement, which keeps you compliant with the prohibited transaction rules. The income grows tax-deferred (traditional) or tax-free (Roth) inside the IRA.
Q: What happens when the lease expires? Is my Miami NNN property still worth anything? A: The residual value depends entirely on location. A well-located Miami NNN building can typically be re-leased to a new tenant at market rates, often with some tenant improvement contribution. The risk window is the last 3–5 years of a long lease, which is why most sophisticated buyers either sell before that window or refinance into a new long-term lease.
Q: How does NNN income get taxed in Miami compared to active business income? A: NNN rental income is generally passive income for federal tax purposes, which means it doesn't qualify for the 20% qualified business income deduction but does benefit from depreciation deductions that often shelter most of the cash flow from current tax. Florida has no state income tax, so your effective rate on NNN income is materially lower than for owners in income-tax states.
Let's find your next property together.
Partnership Realty / Partnership Realty Inc / +1 (561) 629-0358 / carloscabalerealtor.com
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Content Team · Partnership Realty Inc
+1 (305) 340-6251 · partnershiprealtyinc.com