Triple Net Lease
A triple net lease (NNN) is a commercial lease structure in which the tenant pays base rent plus three additional expenses: property taxes, building insurance premiums, and common area maintenance (CAM) costs. Unlike a gross lease where the landlord absorbs these costs into rent, a triple net tenant is responsible for the building's ongoing operating expenses on top of the agreed-upon base rent.
Updated July 13, 2026
Key Facts
- 1Triple net leases are the most common structure in freestanding retail (restaurants, banks, drug stores) and strip mall properties
- 2NNN charges in retail centers typically add $3–$12/sqft per year on top of base rent, depending on property age, type, and location
- 3CAM reconciliations in NNN leases are conducted annually — if actual expenses exceeded estimates, tenants owe the difference
What NNN Tenants Actually Pay
In a triple net lease, rent is only part of your monthly obligation. CAM charges cover landlord-managed expenses: parking lot maintenance, landscaping, exterior lighting, snow removal, and management fees. Property taxes and insurance are typically prorated by your share of total leasable space — if you occupy 10% of a building, you pay 10% of the annual tax and insurance bill.
| Cost Component | Who Pays in NNN | Typical Annual Range (retail) |
|---|---|---|
| Base rent | Tenant | $15–$45/sqft |
| Property taxes (tenant's share) | Tenant | $1.50–$5/sqft |
| Building insurance | Tenant | $0.50–$1.50/sqft |
| CAM / maintenance | Tenant | $2–$8/sqft |
| Structural repairs | Landlord | N/A |
| Roof and foundation | Landlord | N/A |
NNN vs. Gross Lease: Which Is Better?
Neither is inherently better — they're different structures with different risk allocations. A gross lease has a higher base rent but predictable total cost; the landlord absorbs expense fluctuations. A NNN lease has a lower base rent but variable total cost; the tenant bears the risk of rising taxes, insurance premiums, and maintenance expenses.
For tenants in stable, well-maintained properties, NNN can be economical. For tenants in older buildings with deferred maintenance or in markets with rising property taxes, NNN costs can escalate significantly year over year.
Frequently Asked Questions
What is the difference between single net, double net, and triple net leases?
A single net (N) lease requires the tenant to pay base rent plus property taxes. A double net (NN) adds insurance. A triple net (NNN) adds maintenance on top of both. NNN is the most common structure in commercial retail.
Are NNN leases negotiable?
Yes. CAM caps (maximum year-over-year increases in CAM charges), exclusions from CAM (capital expenses, management fees above a certain percentage), and audit rights are all negotiable. Experienced tenants cap CAM increases at 3–5% annually.
Does a NNN lease affect my buildout budget?
Indirectly, yes. If your total occupancy cost (base + NNN charges) is higher than expected, you have less cash flow to service a buildout loan or repay TIA. Always calculate total annual cost, not just base rent, when evaluating a space.