American Automotive Trust purchases real estate properties which
are leased
on a triple net basis to automobile dealers, retailers of other
vehicles,
car rental operations, and vehicle industry repair and service
operations.
Triple net leased properties have been among the best performing
real estate investments over the past decade.
Net leased real estate has important investment performance
characteristics.
First, it provides protection in times of falling market rental
rates as net
lease rents generally are fixed for the duration of the long
term (generally
10 to 15 year) lease. Second, during inflationary times, the
rental income
from a net leased portfolio usually will increase as rent
increases often
are indexed to the consumer price index (CPI) or increase
by a fixed
percentage each year. These attributes provide steady growth
and lower
volatility of rental income from net lease real property as
compared to
other forms of investment real estate.
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