NNN Lease (Triple Net)
A lease structure where the tenant pays base rent plus all operating expenses including property taxes, insurance, and maintenance.
Definition
A Triple Net (NNN) lease is a commercial lease agreement where the tenant is responsible for paying the base rent plus all three major operating expense categories: property taxes, building insurance, and common area maintenance (CAM). This structure shifts most expense risk from the landlord to the tenant, resulting in more predictable net operating income for property owners. NNN leases are the most common structure in small bay industrial and retail properties.
Example
A tenant signs a 3-year NNN lease at $12/SF base rent. They also pay approximately $3.50/SF in NNN expenses (taxes, insurance, CAM), bringing their total occupancy cost to $15.50/SF.