What does “NNN” stand for in a Commercial Real Estate Lease?
ANSWER: Triple Net Lease
If you’ve searched for a commercial real estate space to lease, you’ve probably come across these three letters N-N-N.
First, it’s not an acronym. The three N’s stand for a “triple net lease”. This means that the tenant renting space will pay for all expenses for the property to include:
Real Estate Taxes
Common Area Maintenance in addition to their base rent and utilities.
Although there are common practices throughout the world of commercial real estate, no one landlord does things the same way. Enter the alternative rent structures of a Gross Lease and Modified Gross Lease. We won’t get into those right now, but as a prospective tenant looking for space, its important to know what “NNN” means so that when you’re speaking with a property’s leasing agent you know to clarify with them how NNN expenses are handled.
This brings up another point, how do CRE professionals refer to NNN expenses? Instead of thinking of NNN’s as a moniker for a type of lease, it’s referencing those specific property expenses I referenced previously. A CRE professional may also refer to NNN expenses as “Pass-through Expenses” because their passing through the landlord to the tenant.
When it comes to learning about rent for any commercial property, always ask for clarification on how NNN expenses are handled.
For more information or questions:
Contact Nick Scanlan, Commercial Broker and Leasing Agent
BEI Commercial Real Estate is a locally owned property management, development and commercial real estate firm dedicated to investing in the communities. For 60 years Batavia Enterprises has been an active supporter and participant in local community events and is proud to have helped many local non-for-profit organizations. With properties in Batavia, Geneva, St. Charles, West Chicago, Elburn, Elgin, Sugar Grove and Rockford, the company can provide quality space to help growth and expansion for all types of businesses.
Learn more at www.beicre.com