Triple net lease management, fully recovered.

What NNN actually obligates

A triple net lease shifts three cost categories to the tenant: common area maintenance, real property taxes, and building insurance. The landlord bills estimates through the year and reconciles against actuals afterwards.

The structure sounds simple and rarely is. Each category can have its own pool, its own exclusions, and its own cap. A lease may be net of taxes but gross of insurance, or carry a base year on CAM only. Modeling those distinctions on the lease is what makes the reconciliation defensible.

• Separate recovery pools for CAM, taxes, and insurance
• Per-pool exclusions, gross-up targets, and administrative fees
• Base years and caps applied per pool, not per property
• Monthly estimates billed and netted at reconciliation

Total occupancy cost, not just base rent

Tenants evaluate space on total occupancy cost per square foot — base rent plus recoveries — and so should you. A $28 base rate with $11 of NNN is a $39 deal, and comparing it against a $34 gross rate requires putting both on the same basis.

Vespy reports rent on an area basis with annualized base rent and rent per square foot, and recovery charges bill against the same lease, so the all-in number is derivable rather than assembled by hand.

Estimates through the year, truth at the end

NNN recovery runs on estimates: you bill a monthly figure based on last year’s actuals plus an assumption, then reconcile. Where firms lose money is the reconciliation never happening, or happening so late the tenant disputes it.

Estimates post as ordinary charges through the year, and the reconciliation nets them automatically against the billable amount. The result is a balance due or a credit, issued through the same AR and credit memo trail as everything else.