A commercial lease with a Triple Net (NNN) agreement is a lease structure where the tenant agrees to pay all the ongoing expenses associated with the property. This typically includes property taxes, insurance, and maintenance costs, in addition to the rent. This type of lease is beneficial for property owners as it reduces their operational burden and provides a predictable income stream.
In this article, we will examine three diverse examples of commercial leases with Triple Net (NNN) agreements to illustrate their practical applications.
In this scenario, a local coffee shop is renting a space within a bustling shopping center. The shopping center owner opts for a Triple Net lease to ensure all costs associated with the property are covered by the tenant.
The lease includes the following terms:
Under this agreement, the coffee shop owner is responsible for paying the base rent along with an additional \(1,000 per month for property taxes, insurance, and maintenance, bringing their total monthly payment to \)4,000. This structure allows the property owner to maintain a steady revenue stream while transferring the financial responsibility of property upkeep to the tenant.
A tech startup chooses to lease office space in a business park. The business park owner implements a Triple Net lease to ensure that all operational costs are handled by the tenant, thus providing a clear financial structure.
The lease terms are outlined as follows:
In this case, the startup will pay \(5,000 in base rent plus an additional \)1,800 per month for taxes, insurance, and maintenance. The total monthly obligation amounts to $6,800. This arrangement provides the startup with predictability in budgeting while allowing the owner to pass on the responsibilities of property management.
An established distribution company is leasing an industrial warehouse. The landlord opts for a Triple Net lease to ensure they can predictably manage their finances without worrying about fluctuating property costs.
The lease structure includes:
Here, the distribution company agrees to pay a total of \(12,400 monthly, which consists of \)10,000 in base rent plus $2,400 for the additional costs. This arrangement allows the landlord to secure steady income while delegating the financial responsibilities associated with the property to the tenant.