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Why Is It Called a Net Lease?
Real estate leases come in various forms, each with its own set of terms and conditions. One type of lease commonly used in commercial real estate is the net lease.
Why Do Companies Do Net Leases?
A net lease has benefits for both tenants and landlords. These leases come in different forms and are signified by their number of “N”s, such as NNN, which means triple net lease.
What are the Major Components of a Net Lease?
In commercial real estate landlords sometimes choose to use a net lease, which requires tenants to pay expenses beyond their rent to contribute to the property's operational costs. The components of a net lease can include base rent, property taxes, insurance, and maintenance costs.
How are Triple Net (NNN) Charges Calculated?
Commercial property leases can take numerous forms, from gross to absolute net. Many of the particulars are standard within each type, but there are variations. Therefore, always carefully review a lease's terms to ensure you aren't surprised by what you are responsible for paying.
What Is An Example of a Net Lease?
Net leases generally are for single-tenant properties. They are often associated with office buildings, warehouses, and retail spaces. Retail properties probably utilize net leases more than any other category. These include fast food restaurants, convenience stores, gas stations, and big box stores.
Can You Negotiate a Triple Net Lease?
Triple net leases may be appealing to some real estate investors because the tenant agrees to do most of the heavy lifting under this type of lease structure.
Triple Net Lease Examples to Consider
Triple net leases, also called NNN leased properties, can potentially offer real estate investors several advantages over other types of lease structures, but they aren’t without their potential drawbacks, either.
What Are the Pros and Cons of a Double Net Lease (NN) Property?
Commercial leases typically fall into three categories: gross leases, modified gross leases, and net leases. Within the net lease category, there are single, double, triple, and absolute subcategories. Which is most advantageous for you depends on the type of business, the circumstances, and whether you are the landlord or the tenant. Knowledge is power, and understanding the differences between the leases can help you decide which is most suitable.
What Is A Modified Gross Lease?
A modified gross lease is a variety of commercial real estate lease. In this structure, the tenant pays base rent and a proportional share of some other property costs, including taxes, utilities, insurance, and maintenance. A modified gross lease sits between a gross lease, where the landlord pays for all operating expenses, and a net lease, which passes on property expenses to the tenant.
What Is A Triple Net (NNN) Lease, And What Does It Mean?
As a property owner and investor, executing a lease with a tenant might seem like a routine matter. However, many different types of lease structures are used throughout the commercial real estate industry. A landlord can choose among gross, modified gross, and several variations of a net lease to find the form that best meets their needs, depending on the property and the tenant.
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