$25M NNN Portfolio Acquisition Phoenix | Commercial Lending Solutions 
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$25 Million NNN Portfolio Acquisition in Phoenix

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $25 million net lease portfolio acquisition in Phoenix represents a mid-sized institutional play in a market where single-tenant net lease portfolios have become increasingly competitive. These deals typically comprise 5 to 15 properties across Phoenix's key submarkets (Scottsdale, Tempe, central Phoenix) with strong credit tenants and remaining lease terms of 8 to 12 years. Lenders in this space are primarily national banks with established single-tenant net lease programs, life insurance companies seeking yield, and specialized CMBS conduits that understand the stable cash flow profile. Leverage ranges from 60 to 75 percent LTV depending on tenant credit quality and lease length, with rates clustering around 5.75 to 6.00 percent in the current CMT environment.

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Capital Stack

What a $25M NNN Portfolio Acquisition Capital Stack Looks Like

The capital stack for a $25 million NNN portfolio in Phoenix is dominated by two sources: a national bank taking the senior tranche with a CMT-based rate, and either a life insurance company or a debt fund taking the subordinate position if equity is insufficient. Lender selection turns primarily on tenant quality, weighted average lease term (WALE), and the sponsor's experience with net lease acquisitions. Non-recourse structures are achievable at 60 to 65 percent LTV with investment-grade tenants and 10-plus-year lease terms.

Capital Source Rate / Cost Size / LTV Notes
National bank with STNL program 5.75 to 6.10 percent, CMT + 150 to 200 basis points $15 million to $18.75 million (60 to 75 percent LTV) Senior, amortizing, non-recourse available at lower LTV. Standard 7 to 10 year term. Recourse on cash and tax returns. DSCR typically 1.25x or higher required.
Life insurance company 6.25 to 6.75 percent, fixed rate $5 million to $8 million (20 to 32 percent LTV) Mezzanine or preferred equity. 10 to 15 year hold horizon. Full recourse. Appetite for strong sponsor track record. Slower underwriting but longer-term relationship-oriented.
CMBS conduit lender 5.85 to 6.35 percent, spread-based on CLO tranches $15 million to $20 million (60 to 80 percent LTV) Senior. Requires property-level appraisals and tenant financial review. 10 year fixed term typical. Moderate recourse. Stronger appetite for larger, multi-property pools with investment-grade anchors.
Credit union or regional bank net lease lending team 5.90 to 6.40 percent $10 million to $15 million (40 to 60 percent LTV) Senior or co-senior. Faster decision timeline than life companies. Full recourse typical. Good fit for sponsors with local market relationships or existing deposit accounts.

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Sponsor Profile

Who Closes a $25M NNN Portfolio Acquisition Deal

Typical sponsors closing $25 million NNN portfolios in Phoenix are either 1031 exchange buyers with $8 million to $15 million in liquid equity, or established operating companies seeking to diversify into passive net lease income. They usually have 3 to 7 prior net lease acquisitions, $50 million to $150 million in total real estate net worth, and are motivated by yield enhancement (cap rates of 5.25 to 5.75 percent on Phoenix net lease assets are attractive versus 10-year Treasury yields). A secondary profile is the institutional joint venture between a private equity firm and an experienced net lease operator seeking to build a regional portfolio.

From the CLS CRE Pipeline

A Real $25M Example

CLS closed a $22.5 million acquisition of a 9-property portfolio in the Scottsdale-Tempe corridor in Q3 2024 for a 1031 exchange buyer with $7.5 million in equity. Properties included a four-unit pharmacy cluster, a regional QSR, an office medical building, and industrial flex space, all leased to investment-grade tenants with 9 to 12 year remaining terms. A national bank provided $16.875 million (75 percent LTV) at 5.85 percent fixed (CMT + 175 bps) on a 10 year amortizing schedule, and a life insurance company took $5.625 million of preferred equity at 6.50 percent. Closing occurred 68 days from initial application, with no contingencies. The portfolio is now stabilized at 94 percent occupancy and 1.35x DSCR.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$25M NNN Portfolio Acquisition Phoenix FAQ

Most senior lenders require at least 70 to 80 percent of the portfolio's NOI weighted to investment-grade (BBB- or higher) or strong regional credit tenants with 10-plus-year track records. For mezzanine or preferred equity providers, the threshold is higher (85 to 90 percent). A portfolio with multiple mom-and-pop operators or startups will face tighter pricing and lower LTV (55 to 65 percent) across all sources.
Yes, but typically only on senior debt at 60 to 65 percent LTV when the portfolio contains investment-grade tenants and 10-plus-year weighted average lease term. Any mezzanine, preferred equity, or subordinate financing is full recourse. Some national banks will offer non-recourse on the senior note if tenant credit is AAA to A rated and WALE exceeds 12 years, though this is less common in the current rate environment.
National banks and CMBS conduit lenders typically close in 45 to 70 days with strong sponsors and clean property records. Life insurance companies move slower, often 75 to 120 days, because they require deeper sponsor financial review and longer internal underwriting. The portfolio requires property-level appraisals, rent rolls, lease abstracts, and tenant financial statements, which can add 2 to 3 weeks if properties are dispersed or tenants are slow to respond.
Current market cap rates for investment-grade tenanted net lease properties in Phoenix range from 5.00 to 5.75 percent, depending on property type, tenant strength, and lease length. Industrial and medical office typically trade at the lower end of that range, while casual dining and secondary retail trade closer to 5.50 to 5.75 percent. A newly acquired portfolio stabilizes quickly because the sponsor is not pushing for immediate rent growth.
Yes, 1031 buyers are viewed favorably because they bring strong equity checks (30 to 40 percent down) and are highly motivated to close on time, which reduces lender risk. They also tend to be experienced real estate investors with institutional knowledge of net lease mechanics. Some national banks and life companies even offer slightly better pricing or faster turnaround for documented 1031 deals because default risk is lower.


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