AAA Tenant | Propertylogy

AAA Tenant

By on July 26, 2018

An AAA tenant, or a Triple A tenant, refers to a commercial tenant who has the most desirable credit rating.

Because tenants who fall under this category are assumed to be financially secure with very little likelihood of defaulting on the lease, they are the best tenants that a landlord could wish for.

With such tenants on a rental property, lenders will also be more flexible with their terms of financing.

This is because such premium tenants are:

  • Often rent a larger area than the average tenant, resulting in a larger rental
  • Stable companies or individuals that are likely to make prompt timely rental payments
  • In terms of commercial tenants, could be an anchor tenant that brings in more human traffic

In the event of selling the property, inherited AAA tenants can also be a major selling point.

Buyers can be persuaded to pay a higher price just because there are AAA tenants on the rental roll.

However be mindful that just because a potential tenant is a triple-A tenant, it does not mean that you can take the tenant screening process for granted.

They should still be thoroughly screen with due diligence conducted.

For all you know, there could be recent events that makes you question their stability.

Finally, because these top-tier tenants are usually aware that they are desirable to landlords. So they often use that as leverage to negotiate better, and sometimes outrageous, terms on the lease that are favorable to them.

Even so, a little compromise could be worth it to have one of them as your tenant.

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