Tripe Net Leasing – What does it all Mean to you?

Posted by admin on April 8, 2009 under Good Info - Read It, by Tim Davis | Be the First to Comment

What Does Triple Net Lease Mean?

A lease agreement that designates the lessee (the tenant) as being solely responsible for all of the costs relating to the asset being leased in addition to the rent fee applied under the lease. The structure of this type of lease requires… the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance. The lessee has to pay the net amount of three types of costs, which how this term got its name. This type of lease can also be referred to as a “net-net-net lease” or a “hell or high water lease”.

For example, if a property owner leases out a building to a business using a triple net lease, the tenant will be responsible for paying the building’s property taxes, building insurance and the cost of any maintenance or repairs the building may require during the term of the lease. Because the tenant is covering these costs (which would otherwise be the responsibility of the property owner), the rent charged in the triple net lease is generally lower than the rent charged in a standard lease agreement.

Generally in the Daytona Beach area, we quote most office, industrial, and retail space at a triple net rate. For smaller spaces, and for shorter term leases, we will often simplifiy the rate to a gross rate, which is inclusive of all the expenses that are excepted in a triple net rate.

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