Commercial Real Estate Leases: Understanding Gross, Double Net, and Triple Net Leases
Absolute Net Lease in Commercial Real Estate
An absolute net lease, or absolute NNN lease, is one of the strictest forms of commercial leases. In an absolute net lease, a tenant is generally responsible for insurance, taxes, maintenance and minor repairs, as well as larger structural repairs, such as roof replacement.
Full Service Lease in Commercial Real Estate
A full service lease is a lease in which a tenant pays only a base rate, and the landlord is responsible for paying all other expenses. Full service leases often contain an expense stop, a point above which a tenant becomes responsible for contributing to the operating expenses of the property. Common expenses can include common area maintenance (CAM) fees, utilities, property taxes, and property insurance. However, full service leases can vary widely in their exact terms, so, whether you’re a tenant or a landlord, it’s essential to understand the specific terms of the lease that you have signed.