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What is a triple net lease or NNN lease?
This video provides a basic overview of a common commercial real estate leasing structure known as NNN, or "triple net."

This type of commercial real estate lease involves passing-through expenses to tenants. They can be used in single tenant buildings as well as multiple tenant properties such as shopping centers or strip malls.

In short, the tenant pays a base rent amount per square foot and additionally pays for some or all of the property's operating expenses. The percentage of operating expenses (or NNN charges) they would pay really depends on the square footage the tenant is leasing. For example, if you have 2 tenants, each leasing 1/2 of the property, then they would each pay 50% of the triple net charges and CAM charges.

Which expenses are included in triple net leases?
Operating expenses usually include property taxes, property insurance, and maintenance of the common areas ("CAM charges", for "common area maintenance"). CAM charges cover basic maintenance and repair within common areas, such as landscaping, painting the building or parking lot, janitorial, repairing leaks, signage, etc.

What expenses are not included in a net lease?
Any large structural work on the property would not be included unless otherwise specified in the agreement. These fees typically do not include utilities either, and are a separate charge to either the tenants or landlord, depending on their agreement.

Triple Net Lease Meaning:
To some real estate investors, investing in triple net properties may mean corporate tenants such as CVS, Dollar General, Wendy's, McDonalds, 7-Eleven, etc. To others, triple net property investing may mean investing n gas stations and auto properties around the country. The truth is, it's not a specific type of property, as much as a leasing structure used in a property between the landlord and tenant.

Triple Net Lease Pros & Cons / Triple Net Lease Benefits:
Triple Net leases are preferred by many landlords because they are paid directly for the property's operating expenses. And the NNN charges increase as the operating expenses increase. This makes management and collection fairly simple. When in investing in property with regional, national, or multi-national franchise tenants such as large grocers or fast food establishments, the lease is often guaranteed by the franchisee or even at the corporate level. This is referred to as a "corporate-backed NNN lease."

4 main types of leases in commercial real estate: https://youtu.be/mGYeKyYIlDA

#commercialrealestate #cre #nnn #nnnlease
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DISCLAIMER: This video is provided for informational or entertainment purposes only. Check with your accountant, lawyer, and/or other professionals/advisors before relying on this information. Although we believe it to be reliable, we do not provide any warranties and we do we do not guarantee its accuracy or completeness. Please consult a professional and use common sense. common sense