Net Property Leases
In a Net Property Lease, the tenant is required to pay a gross sum more than the required lease amount. Out of this gross payment made by the tenant, the property owner is then required to pay or settle some expenses such as property insurance, tax, and/or maintenance cost. At the end of the day, what the owner receives is a “net” of the rent.
Net property lease is most common in commercial real estate leasing, and we offer services to both tenants and owners, enlightening them on the peculiarities and advantages of this kind of lease.
There are three types of net property leases, namely:
- Single net leases (N leases)
- Double net leases (NN leases)
- Triple net leases (NNN leases)
The single net lease is one in which the tenant pays for only one expense — specifically property tax. This means all other expenses are left for the owner to handle. Tenants pay less under single net leases than in normal leases since the owner would have to charge a lower base rent because the tenant is handling a responsibility.
In Double net leases, the tenant pays for property tax and insurance in addition to the base rent. This is more common in commercial real estate than the single net lease.
The triple net lease covers property tax, insurance and maintenance cost.
Each type of net property lease has areas where it is best suited, and our aim is to put our clients in the best situation that favors them.