Many business owners associate commercial leases with just two basics: net and gross. A net lease often means lower base rent but added tenant responsibilities for expenses. In a gross lease, you pay a flat rate while the landlord covers operating costs like maintenance. Yet, net leases come in four distinct variations that demand careful consideration.
Single Net Lease and Your Responsibilities
In a single net lease, tenants pay base rent plus a pro-rata share of property taxes, utilities, and services. The landlord remains responsible for structural repairs and other major building expenses.
Double Net Lease Explained
A double net lease shifts more costs to you: base rent, property taxes, building insurance premiums, utilities, and services. Landlords handle only common area maintenance (CAM) and structural repairs.
Triple Net Lease Essentials
Triple net leases—common for warehouses and retail—are tenant-heavy. You cover base rent, all or part of property taxes, management fees, utilities, services, and CAM expenses like maintenance and waste removal. This even includes costs for on-site staff, such as parking attendants.
Absolute Triple Net: The Most Restrictive Option
An absolute triple net lease makes tenants liable for every building expense, no exceptions. Even catastrophic damage from fire or earthquake leaves reconstruction—and all associated costs—on you.
Achieving a Balanced Agreement
Each lease type offers trade-offs. Negotiations require compromise to satisfy both parties. With this expertise, you can evaluate options wisely and secure a property that supports your business goals.
