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.