Primary tabs. Triple net lease (NNN) is normally a commercial lease where the lessee pays rent and utilities as well as three other types of property expenses: insurance, maintenance, and taxes.
What does $25 NNN mean?
NNN stands for net, net, net. It means that the tenant pays most of the expenses. They pay the rent fees plus property taxes, property insurance, and CAM, or common area maintenance. The NNN fees are added onto the base rental fee, which is usually calculated as a dollar-per-square-foot number like $15.
How do you calculate triple net?
Triple nets are typically calculated by projecting the total amount of expenses for the coming year, dividing it by the total rentable square footage of the building, and then dividing that by 12.
Are triple net leases a good investment?
If you're a new investor building wealth while you work or want to make a career out of commercial real estate investing, triple net lease properties are a good idea. They offer a stable and strategic way to accomplish all of these goals.
What is the downside of a triple net lease?
Cons of Triple Net Leases
Tenants might invest some work and time in property management, from hiring repair companies to comparing and buying insurance and protesting taxes if needed. Some unexpected costs (in maintenance or tax liabilities, for example) may arise during the time of occupancy.
What is an example of a triple net lease tenant?
The owner of a small computer business enters into a triple net lease to rent a 2,000 square foot retail space at $20 per square foot annually for a term of five years with an annual 3% increase in base rent. The 2,000 square feet represents 20% of the retail center's square footage.
A percentage lease is a type of commercial real estate lease in which the tenant pays a base rent, as well as a percentage of their sales revenue as additional rent.
— Triple Net Matt (@TripleNetMatt) December 28, 2022
This additional rent is referred to as the "percentage rent." The percentage rent is usually based on sales.
What does $20 NNN mean?
NNN – Triple Net –This type of lease rate includes the base rental rate plus the three N's. One “N” stands for property taxes, one for property insurance, and the final “N” stands for common area maintenance (CAMs).
Frequently Asked Questions
Is a triple net lease good or bad?
Benefits of a Triple Net Lease
The most obvious benefit of using a triple net lease for a tenant is a lower price point for the base lease. Since the tenant is absorbing at least some of the taxes, insurance, and maintenance expenses, a triple net lease features a lower monthly rent than a gross lease agreement.
What does $12 NNN mean?
Commercial spaces may be advertised as “$12/psf NNN” meaning $12 per square foot is the base rent and the NNN expenses will be in addition to that. CAM, or common area maintenance, is one of the three NNN Expenses that commercial tenants pay for as additional rent.
FAQ
- What does n-n-n mean real estate
- What does NNN mean? In real estate, "NNN" is an abbreviation for the phrase "triple net lease." At its core, a triple net lease is
- What is the difference between gross net and triple net lease?
- A lease that requires only that basic rent be paid, usually on a monthly basis, is known as a “gross lease”. Generally, a lease that requires that a Tenant pay additional expenses is known as a “triple net” (“NNN”) lease. The term “triple net” tends to be overused.
What is triple net in commercial real estate
| How do you calculate NNN? | 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. |
| What does NNN stand for in real estate? | Triple net lease Primary tabs. Triple net lease (NNN) is normally a commercial lease where the lessee pays rent and utilities as well as three other types of property expenses: insurance, maintenance, and taxes. |