Triple Net Commercial Lease Agreement
What is triple net commercial lease agreement?
A triple net commercial lease agreement is a lease arrangement in which the tenant agrees to pay for not only the rent but also the operating expenses, property taxes, and insurance of the property. This type of lease agreement is commonly used in commercial real estate, particularly for retail properties. It is also known as a net-net-net lease or NNN lease.
What are the types of triple net commercial lease agreement?
There are three main types of triple net commercial lease agreements:
Single Net Lease: In this type of lease agreement, the tenant is responsible for paying the property taxes in addition to the rent.
Double Net Lease: In a double net lease, the tenant is responsible for paying the property taxes and insurance, in addition to the rent.
Triple Net Lease: A triple net lease is the most common type of lease agreement, where the tenant is responsible for paying the rent, property taxes, insurance, and operating expenses of the property.
How to complete triple net commercial lease agreement
Completing a triple net commercial lease agreement involves the following steps:
01
Gather all necessary information about the property and the tenant.
02
Negotiate the terms of the lease, including the rent amount, lease duration, and any additional provisions.
03
Draft the lease agreement, including all the necessary clauses and provisions.
04
Review the lease agreement with the tenant to ensure mutual understanding and agreement.
05
Sign the lease agreement and make necessary copies for both parties.
06
Keep the original lease agreement in a safe place for future reference.
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Questions & answers
What is a triple net lease agreement?
A triple net lease, also known as an NNN Lease, is a lease in which the tenant agrees to pay their pro-rata share of all expenses associated with property maintenance, taxes, and insurance, in addition to a predetermined base rental rate. These expenses are commonly referred to as operating expenses.
How do you start a triple net lease?
How to Invest in Triple Net Properties Determine Your Preferred Investment Returns. Find A Triple Net Lease Advisor. Set Your Tenant and Term Criteria. Find The Right Lending Partner. Compare Opportunities and Submit an Offer. Perform Thorough Due Diligence on The Asset and Tenant.
How does triple net lease work?
A triple net lease, also known as an NNN Lease, is a lease in which the tenant agrees to pay their pro-rata share of all expenses associated with property maintenance, taxes, and insurance, in addition to a predetermined base rental rate. These expenses are commonly referred to as operating expenses.
What is the downside of a triple net lease?
Drawbacks to a Triple Net Lease There is an inherent danger in using a triple net lease with regards to the unknown. Unexpected and substantial damage to the property could significantly increase your monthly maintenance and repair costs.
What is an example of a triple net lease?
A triple net lease (triple-net or NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.
How is NNN commercial rent calculated?
NNN leases are computed by multiplying the total annual property taxes and insurance for the area by the entire rental square footage of the building.
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