Triple Net Property: Selling Vs. Refinancing Vs. Holding
What circumstances dictate whether triple-net investors sell vs. refinance vs. hold a property. Is it just based on strategy preference? 

Here's my scenario:

* Modified double-net lease. Landlord responsible for structural maintenance, roof, and major parking lot maintenance. 
* Tenant responsible for taxes, insurance, and day-to-day maintenance.
* Credit tenant
* Purchase price = 1,600,000, NOI = 99,000, Cap = 6.1
* 10-year lease, three 5-year extensions, rent escalation of 6% every 5-years of lease term.

What sort of exit strategy makes sense here? Sell at year 5? Refinance at year 5? Hold and hope lease extensions are executed for a full 25-years? 

Thanks for any insight here.
[{"id": "i0r3uh6", "text": "If you were handed the cash today from selling this, what would you flip it into?", "replies": [{"id": "i0r3ve9", "text": "\u201e\u00bfo\u0287u\u0131 \u0287\u0131 d\u0131l\u025f no\u028e plno\u028d \u0287\u0250\u0265\u028d 's\u0131\u0265\u0287 \u0183u\u0131ll\u01dds \u026fo\u0279\u025f \u028e\u0250po\u0287 \u0265s\u0250\u0254 \u01dd\u0265\u0287 p\u01ddpu\u0250\u0265 \u01dd\u0279\u01dd\u028d no\u028e \u025fI\u201e", "replies": [{"id": "i0ravap", "text": "Bad bot", "replies": [], "depth": 3}], "depth": 2}, {"id": "i0rjjl0", "text": "Gotcha. Use selling for a specific purpose, 1031, higher cash flow asset, etc. \n\nI would assume that refi essentially should be reserved for the same type of scenario, but would include better loan terms, or needed landlord improvements on the property. \n\nTherefore, let's say you hold a NNN property until the end of the lease term (10-years), with 25-year mortgage @ 4.5%, what's your strategy when the lease term is up? Build a reserve during the initial lease term and pray that the reserve gets you through the vacancy period? \n\nOr, do you hold for cash flow for 5-years, then sell, 1031, and repeat. This strategy would protect you from having to incur the cost and stress of having to re-tenant the property at the end of the initial 10-year lease. \n\nDoes this make sense? Or am I missing something?", "replies": [{"id": "i0rk179", "text": "When the lease is up you either renew, or you get a new tenant. If the building still has marketable value, either option is workable.", "replies": [], "depth": 3}, {"id": "i0rsk73", "text": "Also circles too if it\u2019s in a appreciating area vs a rural dollar store location. \n\nBuying/selling has a lot of costs. If you like the location and tenant, I would generally hold for 10-15 years. After that you need to look into property refurbishment and other costs. Might be worth it then, but make that decision a long time from now, not today.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i0rqad4", "text": "Ideally, 10yr loan makes the most sense. Refinancing with less than 5yrs remaining on a lease will have an impact on the rate. In my experience, our clients hold to lease maturity, then execute an extension and sell with the fresh lease. It is important to take into account the cost of refinancing (lender fee, appraisal, etc.) vs. selling and buying a new property (broker fees + all refinance fees).", "replies": [], "depth": 1}, {"id": "i0sj1hp", "text": "This is a very high level question, and it will depend on what your tenant's discount rate is. I they took cash out, how much interest could they earn on their cash? What is their current interest rate? Based on this number will determine which route is best for the tenant.", "replies": [{"id": "i0srryd", "text": "Can you expand on this? What do you mean which route is best for the tenant? Do you mean whether or not tenant decides to extend? Or are you talking about new tenants after initial lease term is up?\n\nI guess I don't understand how these factors from the tenant side effect my exit strategy as an investor.", "replies": [], "depth": 2}], "depth": 1}]