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What is a triple net lease?
A triple net lease, or NNN lease, is a commercial lease where the tenant pays base rent plus the property's three main running costs: property taxes, building insurance and maintenance.
In a little more detail
The three 'nets' are those three costs. With a triple net lease, the landlord's income is steadier because the tenant covers most of what it takes to run the building.
It's common for retail, restaurants and single-tenant buildings. It's different from a gross lease, where the tenant pays one amount and the landlord covers the running costs out of it. Many leases sit in between, with the tenant paying some costs but not all.
- A shop pays $4,000 a month in base rent.
- On top of that, it pays its share of property taxes, insurance and common area maintenance, around $900 a month.
- The tenant's real monthly cost is about $4,900.
Things to watch
- Spell out exactly which costs the tenant pays, and how you'll split shared costs.
- Agree how and when you'll reconcile estimates against actual costs.
- Tenants should ask for past expense records before signing.
See how DigitalTenant handles commercial units, leases and charges alongside residential ones.
This is a plain-English explanation, not legal advice. Rules vary by state and city, so check your local law or talk to an attorney before you act on it.
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