commercial-lease-expert

Net Lease Structures

Net Lease (Standard for multi-tenant):

• Total Rent = Base Rent + (Proportionate Share × Operating Expenses) + Additional Rent
• Tenant pays proportionate share of building operating expenses
• Proportionate Share = Tenant's Rentable Area ÷ Total Building Rentable Area

Triple Net (NNN) (Standard for single-tenant):

• Tenant pays base rent PLUS all property expenses (taxes, insurance, utilities, maintenance, repairs, management)
• Landlord receives "net" rent with minimal obligations

Modified Gross/Base Year (Common in office):

• Base year operating costs established (Year 1)
• Tenant pays proportionate share of increases above base year
• Protects landlord from inflation while giving tenant cost certainty

Key Lease Components