Triple Net Lease
Table of Contents
Key Takeaways
- Net leases are types of commercial real estate leases where the tenant is responsible for additional costs beyond base rent.
- Triple net leases are the most comprehensive form of this structure, shifting most cost responsibility to the tenant (often including base rent, property taxes, insurance, and maintenance costs).
- Typically involve long-term leases running between 10 and 20 years.
What is a triple net lease?
A triple net lease, often abbreviated as an NNN lease, is a commercial lease structure in which tenants cover all major operating expenses— property taxes, insurance, and maintenance— in addition to base rent. In exchange, tenants typically benefit from lower base rent than they would under a gross lease, where the landlord covers those costs.
For tenants, NNN leases carry greater financial exposure to fluctuating operating costs. For investors and property owners, they represent a stable, predictable income stream with reduced management responsibilities, making this structure common for large retail and corporate properties. NNN leases are typically long-term arrangements, often running between 10 and 20 years.
NNN leases are commonly used in retail and single-tenant commercial properties, often with investment-grade tenants.