Whether you’ve been reading about commercial buildings or have been leasing them for a while, you know there are a lot of variances on the types of leases and what goes in them. Unlike residential leases, which are all fairly standard, commercial leases can get very specific, and there are numerous structures to them. Single net, double net, triple net, absolute triple net…they’ve all got their pros and cons, and each one that’s drawn up has its own stipulations.
So, with all of those differences, which of these leases is the most common for commercial buildings?
Many sources point to the triple net (NNN) lease as the most common. This type of lease charges the tenant their rent plus a base rate for janitorial, utilities, and common area maintenance (CAM). This helps landlords ensure they have a steady cash flow, and asks tenants to take responsibility for the costs of maintaining the building that they and their customers use.
However, it seems that it’s difficult to pinpoint one most popular commercial lease, given the variation in industries that utilize them. For example, strip mall spaces are commonly put under a percentage net lease, a type of lease that only applies to retail spaces. An office space with many tenants might be more likely to be under a triple net lease, given the expense of keeping up the building and wear and tear of many people coming in and out.
It seems that triple net leases are the most common, but commercial leases for each business are often as unique as the business themselves, so it could vary depending on many factors.