What is the difference between a double net and triple net lease?

A net lease is a real estate lease in which a tenant pays one or more additional expenses. Double net leases include property taxes and insurance premiums, in addition to the base rent. A triple net lease includes property taxes, insurance, and maintenance costs, in addition to the base rent.

What does a net net lease mean?

Net lease A type of commercial real estate lease under which you typically pay for one incidental expense directly. In a single net lease, you usually pay the base rent plus property taxes (though in some cases, you might pay for insurance or utilities instead). The landlord pays all other expenses.

What is an nn & NNN lease?

Let’s start by defining a NNN lease – a lease in which the tenant agrees to be responsible for paying rent in addition to all of the operating expenses, including taxes, insurance, repairs and utilities. When any one of these items is covered by the landlord, the roof for example, it becomes a NN lease.

What are NNN charges?

On an NNN lease, tenants pay additional expenses in addition to the lease fee, to the landlord or lessor. The NNN fees includes property taxes, property insurance and common area maintenance for a building (CAM).

What are the benefits of a triple net lease?

The most obvious benefit of using a triple net lease for a tenant is a lower price point for the base lease. Since the tenant is absorbing at least some of the taxes, insurance, and maintenance expenses, a triple net lease features a lower monthly rent than a gross lease agreement.

Why would you want a triple net lease?

Why are Triple Net (NNN) Leases so Common? Landlords prefer NNN leases because they remove some of the unknown financial risk related to commercial property. If taxes or insurance increase, or if unexpected maintenance costs are incurred, then the tenant is on the hook to bear the burden of the additional expense.

How do you value a triple net lease?

NNN leases are calculated by adding the estimated common area maintenance expenses, annual property taxes, and the building insurance for the property. This number is then divided by the total square footage of the building and given to the tenants on a per square foot basis.

What you should know about the triple net (NNN) lease?

A Triple Net (NNN) Lease is a commercial lease agreement in which the tenant agrees to pay a base rental amount and the net amount of the landlord’s real estate taxes, the net amount of the building insurance, and the net amount of the common area maintenance expenses.

What is an example of a triple net lease?

Triple net leases are commonly used in commercial properties, such as shopping malls and apartment buildings. For example, under a triple net lease of an apartment buiding, a lessee may agree to manage the property, rent the apartments, maintain the building, and pay all costs, including taxes,…

What is a double net commercial lease?

Double Net Lease Defined. A double net lease is a lease agreement in which the tenant is responsible for both property taxes and premiums for insuring the building. Unlike a single net lease, which only requires the tenant to pay property taxes, a double net lease passes more expenses along in the form of insurance payments.

How does a triple net lease work?

A triple net lease ( triple – Net or NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property including real estate taxes, building insurance, and maintenance. These payments are in addition to the fees for rent and utilities,…