What is an example of a triple net lease?
What is an example of a triple net lease?
Why Triple Net Leases are Popular With Investors As such, the risk of a credit tenant defaulting on their lease payments is low, even in times of economic distress. Examples of credit include CVS, Walgreens, and Dollar General.
What is a triple net commercial lease agreement?
A triple net lease (triple-Net or NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property including real estate taxes, building insurance, and maintenance.
How much does triple net add to lease?
Now we have to add on the NNN cost which may range from $1 to $20 a square foot based on the use and costs. It is typical to see a $3 a square foot NNN cost in my area, which would add $15,000 a year or $1,250 a month to the costs. Your base lease rent of $4,166.67 could easily turn into $6,000 a month actual cost.
What is the landlord responsible for in a triple net lease?
With a Triple Net Lease—sometimes referred to as “NNN”—the tenant assumes responsibility for all costs of the property, in addition to paying the rent. The tenant pays the utilities, real estate taxes, building insurance, and maintenance.
Who pays for a new roof in a triple net lease?
As the triple net property owner (unless otherwise specified in the NNN lease), you’ll generally be responsible for maintaining and repairing these 3 main aspects of your building: Roof (repairs, maintenance, upgrades) Exterior Walls. Utility Repairs and Upkeep (for major things such as plumbing and electricity)
Who pays for roof repairs in triple net lease?
In a triple net lease property, the tenant agrees to pay for all the expenses involved in operating the property. These expenses include fixed and variable expenses, as well as common area maintenance costs (CAM). Generally, the owner is responsible only for structural repairs.
Who pays for structural repairs in a triple net lease?
The triple net lease requires the owner to shoulder the cost of structural repairs. That responsibility makes it essential that the lease defines the projects that will be considered maintenance versus structural repairs. One can make an argument that replacing a roof is a repair or a capital expenditure.
What is the most common type of commercial lease?
Triple Net Lease
A Triple Net Lease (NNN Lease) is the most common type of lease in commercial buildings. In a NNN lease, the rent does not include operating expenses. Operating expenses include utilities, maintenance, property taxes, insurance and property management.
Who is responsible for roof repairs in a commercial lease?
Landlords
Landlords are normally responsible for any structural repairs needed to maintain commercial properties. This includes exterior walls, foundations, flooring structure and the roof.
Are triple nets negotiable?
Absolutely not! There are many areas where a tenant can negotiate a NNN lease to make it more favorable. If the tenant is taking on all responsibility and risk of the landlord’s overhead, then the tenant may be able to negotiate a more favorable base rental amount.
What you should know about the triple net (NNN) lease?
A Triple Net (NNN) Lease is a commercial lease agreement in which the tenant agrees to pay a base rental amount and the net amount of the landlord’s real estate taxes, the net amount of the building insurance, and the net amount of the common area maintenance expenses.
Triple net leases are commonly used in commercial properties, such as shopping malls and apartment buildings. For example, under a triple net lease of an apartment buiding, a lessee may agree to manage the property, rent the apartments, maintain the building, and pay all costs, including taxes,…
What is a commercial property lease?
A commercial real estate lease is a rental agreement that allows a business to rent commercial space from a landlord. Commercial leases come in three main forms: full-service leases, net leases, and modified gross leases. The process of identifying, negotiating,…
What is a commercial rental contract?
A commercial lease agreement is a contract to rent retail, office, or industrial space between a landlord and tenant . The tenant pays a monthly amount to the landlord in return for being allowed the right to use the premises for their business purpose.
