NNN (Triple Net)
A lease structure where the tenant pays base rent plus its share of the three nets — common area maintenance, property taxes, and building insurance.
Also called: triple net, triple net lease, NNN lease
A triple net (NNN) lease shifts three categories of building cost to the tenant on top of base rent: common area maintenance, real property taxes, and building insurance. These are the three “nets.”
How it is billed
The landlord estimates the annual cost of each category, divides by the tenant’s pro-rata share, and bills a monthly estimate through the year. After year end, actual costs are reconciled against what was billed, producing either a balance due or a credit.
This means NNN charges are never truly fixed. A budgeted $6.40 per square foot is an estimate, and the reconciliation determines what was actually owed.
The lease spectrum
| Structure | Tenant pays |
|---|---|
| Gross / full service | Base rent only; landlord absorbs operating costs |
| Modified gross | Base rent plus increases over a base year or stop |
| Triple net (NNN) | Base rent plus CAM, taxes, and insurance |
| Absolute net | Everything, including structure, roof, and capital |
“NNN” is used loosely in practice. Many leases described as triple net exclude structural and roof replacement, which makes them something closer to double net. The lease language governs, not the label.
Comparing NNN against gross quotes
A $28 NNN rate with $11 of recoveries is a $39 deal. A $36 full-service gross rate is cheaper in year one, even though the headline number is higher.
Because gross leases usually still expose the tenant to increases over a base year, the comparison only strictly holds for the first year — after which the gross tenant’s exposure grows too, just from a higher starting point.
The NNN occupancy cost calculator puts both structures on an all-in per-square-foot basis.
Why NNN is common in industrial
Single-tenant industrial buildings are the cleanest NNN case: one tenant, a 100% share, minimal common area, and often no gross-up because there is no vacancy to normalize. The complexity in NNN comes from multi-tenant properties, not from the structure itself.