A Glossary of CRE & PropTech Terms
Ever wondered how some commercial landlords manage to minimize their expenses while maximizing their rental income? Enter the “triple net lease” or “NNN lease.” This piece will help you better understand what a triple net lease is and why it matters in the real estate world.
A triple net lease is an agreement that shifts the responsibility of most costs associated with a leased space from the landlord to the tenant. This includes costs like insurance premiums, property taxes, and maintenance expenses.
Why Use a NNN Lease?
As a property owner, a triple net lease is an ideal lease agreement for a few reasons. It minimizes financial responsibility, provides more predictable revenue (by removing operating expenses from the equation), and usually guarantees longer lease terms. Most importantly, the fixed monthly payments help protect against volatility in expenses.
From the lessee’s perspective, a triple net lease can be attractive because it allows them to lease a space for longer periods while giving them more control over their operating expenses (OpEx). These leases often come with a lower base rent since the tenant is assuming additional costs, which can make it financially appealing for the right tenant.
