Commercial Real Estate Insight of the Week – Week 5

Understanding Triple Net (NNN) Leases

When searching for commercial space, many tenants focus on the advertised rental rate. However, understanding the full cost of occupancy is just as important.

One of the most common lease structures in commercial real estate is the Triple Net (NNN) lease. NNN leases are frequently used for retail, office, and industrial properties because they allow landlords to pass through certain operating expenses while providing tenants with greater transparency regarding building costs.

What Does an NNN Lease Include?

In addition to paying base rent, tenants are generally responsible for their proportionate share of:

• Property Taxes – Your share of the real estate taxes assessed on the property.
• Building Insurance – Your portion of the building's insurance premiums.
• Common Area Maintenance (CAM) – Expenses associated with maintaining common areas such as parking lots, landscaping, sidewalks, lighting, snow removal, and building operations.

Why Understanding NNN Expenses Matters

Two commercial properties may advertise the same rental rate, but the total cost of occupancy can vary significantly depending on the annual NNN expenses.

Before signing a lease, it's important to request an estimate of these costs so you have a complete understanding of your financial commitment.

Godino Tip of the Week

Always ask for an estimate of annual NNN expenses—not just the advertised rental rate.

Knowing the total occupancy cost allows you to accurately compare properties and avoid unexpected expenses after your lease begins.

At Godino & Company, we help tenants, landlords, investors, and business owners understand every aspect of commercial leasing so they can make informed real estate decisions with confidence.

If you're considering leasing office, retail, industrial, or medical space, we'd be happy to help you evaluate your options and negotiate the right lease structure for your business.