Triple net lease
A commercial lease where the tenant pays base rent plus property taxes, insurance, and maintenance. Common in retail and single-tenant commercial buildings. Passes most property costs through to the tenant.
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Part 1 of 4
Why a seller cares
Under a triple net lease the tenant pays taxes, insurance and maintenance on top of rent, so the owner's income is nearly all profit. Buyers pay a premium for a good NNN tenant, and the lease's remaining term is most of the value.
Part 2 of 4
A simple example
Your small retail building is leased NNN to a national tenant with eight years left. Buyers price it on the rent and the credit of the tenant, almost like a bond.
| What the buyer weighs | Why |
|---|---|
| The tenant's credit | The rent is only as good as who pays it |
| Years left on the lease | Income they can count on |
| Rent bumps in the lease | Growth without doing anything |
A triple net building sells on its lease. The building itself is almost secondary.
Part 3 of 4
What people get wrong
That NNN means the owner has no costs. Roof and structure usually stay with the owner, and the lease says which.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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