N, NN, NNN & Absolute NNN Leases
Net Leases, NN Leases, NNN Leases, and Absolute NNN Leases are all types of commercial real estate leases that differ in terms of the responsibilities and obligations of the landlord and the tenant.
Net Lease: A net lease is a commercial lease agreement where the tenant is responsible for paying a portion of the property expenses, usually property taxes, insurance, and maintenance costs. The landlord still retains responsibility for any major repairs or structural issues.
Double Net Lease (NN Lease): In an NN lease, the tenant is responsible for paying property taxes and insurance in addition to their base rent, while the landlord is responsible for the structural and maintenance costs.
Triple Net Lease (NNN Lease): In an NNN lease, the tenant is responsible for paying property taxes, insurance, and maintenance costs, in addition to the base rent. The landlord usually only retains responsibility for major structural repairs.
Absolute Triple Net Lease (Absolute NNN Lease): In an absolute NNN lease, the tenant is responsible for paying all property expenses, including taxes, insurance, maintenance, and any major structural repairs or replacements. The landlord has little to no responsibility for the property beyond collecting rent.
Overall, the main difference between these leases is the extent of the tenant's responsibilities for property expenses, with an Absolute NNN lease placing the most responsibility on the tenant and a Net lease placing the least. The lease agreement should outline which expenses are the responsibility of the landlord and which are the responsibility of the tenant.
If you have any questions about this article or would like to discuss a scenario of your own with our team, please feel free to contact Colin Dubel at firstname.lastname@example.org or 949-735-6415.