Aaron’s History
Aaron’s, Inc. traces its origins back to 1955 when it was established as Aaron Rents, a small rental business based in Atlanta. Initially offering folding chairs to auction houses, the company quickly expanded its inventory to include furniture, electronics, and appliances. Franchising opportunities were introduced in 1962, fueling the company’s growth throughout the Southeastern United States. 1995 Aaron’s went public and began trading on the New York Stock Exchange. The company continued to evolve, diversifying its product offerings and acquiring Progressive Finance Holdings in 2014. A rebranding initiative took place in 2018, leading to the name change to Aaron’s, Inc. In 2020, Aaron’s formed a strategic partnership with Rooms To Go, solidifying its position as a leading lease-to-own provider.
Why Invest in Ground Lease and NNN Lease of Aaron’s?
Investing in Aaron’s ground lease and triple net (NNN) lease properties offer compelling reasons:
1) Aaron’s NNN Property Investment: Stable income
Investing in ground leases and NNN leases of Aaron’s properties can provide investors with a stable and reliable income stream. These types of leases ensure consistent rental payments, as Aaron’s is responsible for covering most if not all, property expenses. This arrangement helps to minimize financial uncertainties and maintain a steady cash flow for investors.
2) Aaron’s NNN Property Investment: Established tenant
Investing in Aaron’s properties provides the advantage of a well-established and reputable retail brand. Aaron’s has a strong presence in the furniture, electronics, and appliance market, instilling confidence in investors regarding consistent rental income. Aaron’s solidifies the stability and reliability of the tenant with its proven track record, large customer base, and trusted brand.
3) Aaron’s NNN Property Investment: Low management responsibility
Investing in ground leases and NNN leases of Aaron’s properties reduces the landlord’s management responsibilities. With these leases, Aaron’s assumes most property expenses, including property taxes, insurance, and maintenance costs. This arrangement allows investors to be more passive in property management, freeing up time and resources for other endeavors.
4) Aaron’s NNN Property Investment: Favorable lease terms
Aaron’s typically signs long-term lease agreements, often spanning 10 to 20 years or more. These extended lease terms provide investors with a reliable and predictable cash flow over an extended period. With long-term leases, the risk of vacancies or tenant turnover is reduced, providing stability and financial security for investors.
5) Aaron’s NNN Property Investment: Real estate value
Investing in Aaron’s properties offers rental income and the potential for real estate appreciation. Over time, the value of the underlying land or property may increase, providing additional returns on the investment. This potential for real estate value appreciation adds a long-term growth component to the investment, enhancing the overall return on investment potential.
Pros and Cons of Aaron’s Ground Lease and NNN Lease Investment
Pros:
1. Stable income from a well-established retail brand.
2. Established tenant with a solid customer base enhances rental income reliability.
3. Low management responsibility as Aaron’s covers property expenses.
4. Long-term lease agreements provide stability and predictable cash flow.
Cons:
1. Lease renewal risk when the term expires.
2. Dependency on Aaron’s success and market conditions.
3. The competitive retail landscape may impact profitability.
4. Limited control over property decisions.
5. Economic and market risks associated with real estate investments.
Thorough due diligence, including analyzing lease terms and the financial health of Aaron’s, is crucial. Seek guidance from real estate professionals and financial advisors to align your investment strategy with your goals and risk tolerance.
