If you’re in the market for new space for your business and are looking to lease, it is imperative that you understand the difference between the two common types of leases, NNN and Gross.
The term NNN Lease, or Triple Net Lease, refers to a lease where the tenant is responsible for not only the rent but the operating expenses also. The NNN, or Net-Net-Net, generally refers to the Common Area Maintenance (CAM), real estate taxes, and insurance. In this case, the tenant bears the entire risk of unexpected changes in operating expenses.
A Gross Lease is a term used for a lease where the Landlord assumes the operating expenses. A Gross Lease is generally an all inclusive “out the door” payment structure. The Landlord is one who bears the risk of all unexpected changes in operating expenses.
With any lease, it is important to read the details very carefully to determine who pays for what.
