Triple Net Lease

A triple net lease (also known as a NNN lease) is a type of lease agreement commonly used in commercial real estate where the tenant is responsible for paying, in addition to base rent, the property's real estate taxes, building insurance, and maintenance costs. These are often considered the three "nets" in a triple net lease: property taxes, insurance, and maintenance.

This type of lease can be beneficial for the landlord as it transfers the costs and responsibilities associated with owning a property to the tenant, allowing the landlord to receive a net income from the property without having to worry about the variable costs of property ownership.

For the tenant, a triple net lease may mean a lower base rent since they are taking on additional expenses. However, they also have to budget for variable costs that may fluctuate over time, such as property taxes or insurance premiums. This lease structure also gives the tenant more control over the property, which can be an advantage for businesses that want to maintain their premises in a specific way.

While a triple net lease can be beneficial in some cases, it's important for both landlords and tenants to clearly understand the terms of the lease agreement. Each party should consider their potential responsibilities and costs before entering into a triple net lease.