Definition: A Triple Net Lease is also known as Net Net Net Lease or NNN Lease. This is a type of net lease in which the tenant pays all or part of the taxes, insurance, and maintenance associated with use of the property. These fees are paid in addition to the tenant's regular monthly rent.
Definition: Double Net Lease is a type of net lease in which the lessee (tenant) pays all or part of taxes and insurance associated with use of the property. These fees are paid in addition to monthly rent for use of the actual space.
Definition: A Net Lease is a type of commercial real estate lease in which the lessee (tenant) pays for their space, as well as for part or all of certain “Usual Costs” (expenses associated with operating, maintenance and use of the property) that the landlord pays.
Expenses incorporated into net leases may include taxes, utilities, janitorial services, property insurance, property management fees, sewer, water, and trash collection. Net leases almost always favor the lessor (landlord) and should be negotiated to include caps, or, the maximum amount a landlord can increase fees each year.
Definition: Fully Serviced Lease refers to a lease in which the monthly rent includes the cost of certain types of services, which may include janitorial services, trash collection, utilities, water and sewer charges, property taxes, etc.
Instead of the tenant opening their own service or utility accounts and directly paying for these costs, the landlord pays for the expenses, but includes an amount in the monthly rent to help off-set these costs.
Definition: The Modified Net Lease As a compromise between the gross lease and the triple net, the modified net lease is quite helpful in helping landlords and tenants to structure lease terms that work for both. This article gives the details of how they differ from the other lease types.
Definition: Ground lease agreement usually permits the construction of a building on the lease by the tenant. The lease agreement will also stipulate conditions for the disposition of the building at the expiration of the lease term. The building, although built at the expense of the tenant, will legally belong to the land owner, unless otherwise stated in the agreement. In rare cases, it may be agreed that the tenant recovers the cost of the building, wholly or partly from the land owner, upon expiration of the lease period.
Definition: A leaseback is very simple really. Sometimes known as a sale/leaseback or sale and leaseback, it is a transaction wherein the owner of a property sells that property and then leases it back from the buyer. The purpose of the leaseback is to free up the original owner's capital while allowing the owner to retain possession and use of the property. The type of property involved can be anything from residential or commercial real estate to equipment or vehicles.
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