Commercial leases are not one-size-fits-all. The structure determines who pays what beyond base rent, which makes a big difference to your real monthly cost.
- Triple net (NNN). The tenant pays base rent plus a share of property taxes, insurance and common area maintenance. Base rent is often lower, but total costs can vary.
- Gross (full service). The tenant pays a single rent amount, and the landlord covers most or all operating expenses. It offers predictability, often at a higher base rent.
- Modified gross. A blend of the two. Some expenses are included in the rent and others are passed through, based on what the lease specifies.
Questions worth asking
- What expenses are passed through, and how are they calculated?
- How much can rent increase, and when?
- What is the lease term, and are there renewal options?
- Is there a tenant improvement allowance or free rent period?
- Who is responsible for repairs to major building systems?
Every lease is negotiable, and the details matter. Our commercial brokers can help you compare options, and you should always have an attorney review the final document.
This article is general information, not legal, tax or financial advice. Every transaction is different, so talk with your agent and the appropriate professionals about your situation.
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