What is a Triple Net Lease?

In the world of commercial real estate, understanding different lease structures is crucial for both tenants and landlords.

A triple net lease (NNN) is a lease agreement where the tenant is responsible for all property expenses. This includes taxes, insurance, and maintenance, in addition to paying rent. This setup provides landlords with a consistent income stream while transferring many financial responsibilities to the tenant.

For investors, a triple net lease can be an attractive option, as it reduces the risk of unexpected costs. Meanwhile, tenants benefit from lower base rent compared to other types of leases. For example, a gross lease, where landlords cover most property expenses. This arrangement requires tenants to manage operational costs but also offers them control over maintenance and other essential services.

Many landlords choose net leases due to their ability to mitigate financial risks, making them a popular option in the commercial property market.

Triple net leases are typically used for single-tenant properties, providing clear terms and expectations for both parties.