Full Service/Gross Lease
Tennant Pays: Rent + utilities
Landlord Pays: All operating expenses
Defining Features: Tenants receive one bill but can incur additional expenses post-base year
Net Lease
Tennant Pays: Rent, utilities + some building operating expenses
Landlord Pays: The rest of the operating expenses (if applicable)
Defining Features: 3 types of net leases: Tripla/”NNN”, Double/ “NN”, Single/”N”
Triple Net Lease (“NNN”)
Tennant Pays: Rent, utilities + proportionate share of building operating expenses (e.g. maintenance fees, insurance, property taxes)
Landlord Pays: Base building maintenance and repairs
Defining Features: Essentially opposite of gross lease. Gives tenants more control over their spaces
Double Net Lease (“NN”)
Tennant Pays: Rent, utilities + proportionate share of property taxes and insurance
Landlord Pays: Building maintenance
Defining Features: Popular office lease type
Single Net lease (“N”)
Tennant Pays: Rent, utilities + proportionate share of property taxes
Landlord Pays: Building insurance and maintenance
Defining Features: Less common office lease type
Modified Gross Lease
Tennant Pays: Rent, utilities + a portion of building operating expenses
Landlord Pays: The rest of the building’s operating expenses
Defining Features: Modified gross leases vary widely
Absolute Lease:
Tennant Pays: Rent, utilities + all building expenses, including structural repairs
Landlord Pays: Nothing
Defining Features: Rarely used. For larger creditworthy tenants
Percentage Lease
Tennant Pays: Rent, utilities + all building expenses, including structural repairs
Landlord Pays: Typically, some or all of the operating costs
Defining Features: Primary use is retail