What is Triple NET as it relates to Pressure washing

Triple net, often abbreviated as "NNN," is a lease agreement structure commonly used in commercial real estate. It is a type of lease in which the tenant is responsible for paying not only the base rent but also the operating expenses associated with the property. These operating expenses typically include:

  1. Property Taxes: The tenant is responsible for paying their share of the property taxes associated with the leased space.
  2. Property Insurance: The tenant is required to maintain insurance coverage for the leased space, including liability insurance, and they are responsible for paying the premiums.
  3. Common Area Maintenance (CAM) Expenses: CAM expenses cover the costs of maintaining and operating common areas of the property, such as landscaping, parking lots, security, and shared utilities. Tenants are typically responsible for their proportionate share of these expenses, which are often calculated based on the square footage of their leased space compared to the total square footage of the property.
Triple net leases are commonly used in commercial real estate, such as retail, office, and industrial properties. They shift a significant portion of the property's operational costs and responsibilities from the landlord to the tenant. This can be beneficial for landlords because it helps stabilize their income and allows them to pass on the costs of property ownership to the tenant. However, it also places more financial responsibility on the tenant, as they must budget for and pay these additional expenses in addition to their base rent.

Triple net leases are often seen in long-term leases and can be structured in various ways, depending on the specific terms negotiated between the landlord and tenant. These leases are typically used when the property is well-maintained, and the tenant has a strong interest in ensuring that the property is kept in good condition.

Blog entry information

Ron Musgraves
Last update

More entries in General