Net lease glossary
Corporate Guarantee
A lease guarantee from the tenant's parent company, putting the parent's balance sheet behind the rent obligation.
A corporate guarantee means the parent company, not just a local operating entity or subsidiary, is liable for rent and lease obligations. For a national chain, a corporate guarantee from a rated parent is the strongest credit an investor can get and is the basis for most investment-grade net lease pricing. Investors should confirm exactly which entity signs or guarantees the lease, since a subsidiary with the same brand name may have far fewer assets.