Lease Types

There are 3 types of commercial leases: Gross Lease (Full-Service Lease), Net Lease, and Modified Gross Lease, with Triple Net Lease and Modified Gross Lease being the most common.

GROSS LEASE (FULL-SERVICE LEASE)

All Inclusive
Landlord pays for most all expenses on the property, including:
- Taxes
- Insurance
- Maintenance
Excess utility consumption is sometimes charged back to tenant
Tenant pays their own insurance and taxes

NET LEASE

All Inclusive
Tenant pays a pro-rated payment of certain expenses, including:
- Real Estate Taxes
- Property Insurance Taxes
- Common Area Maintenance items (CAMS), such as:
  - Janitorial Services
  - Property Management Fees
  - Sewer
  - Water
  - Trash Collection
  - Landscaping
  - Parking Lots
  - Fire Sprinklers
  - Any Commonly Shared Area or Service
3 variations of the net lease:

Single Net Lease (N Lease)

Tenant pays base rent plus a pre-rated share of the property tax
Tenant also pays for individual utilities and janitorial services
Landlord covers all other building expenses

Double Net Lease (NN Lease)

Tenant is responsible for base rent plus a pro-rata share of property taxes and insurance
Landlord covers expenses for repairs and common area maintenance
Tenant is responsible for their own janitorial and utility expenses

Triple Net Lease (NNN Lease)

Tenant pays base rent plus all or part of:
- Taxes
- Insurance
- CAMS
Tenant pays the costs of janitorial services, utilities, their own insurance and taxes
Lease fluctuates from month-to-month as operating expenses increase or decease

MODIFIED GROSS LEASE

Rent is requested in one lump sum and includes:
- Property Taxes
- Insurance
- CAMS
Tenant pays the costs of janitorial services and utilities
Tenant pays fixed amounts for certain services on top of rent for the actual lease space
Gross Up: If the building is less than 90-95% occupied, then expenses are still calculated for the tenants pro-rated share of operating expenses