Expert Net Lease Property Brokerage Services | Bast Commercial Group

Triple Net (NNN) Lease

A Triple Net (NNN) lease places the responsibility of property taxes, insurance, and common area maintenance (CAM) on the tenant, in addition to the base rent. This lease type shifts the risk of variable operating expenses to the tenant, making it popular among landlords. For tenants, an NNN lease often means a lower base rent but requires them to handle and budget for additional costs. This lease is ideal for businesses that want greater control over their property expenses.

Key Benefits for Landlords:

• Reduced risk of variable operating expenses
• Potential for higher returns

Key Benefits for Tenants:

• Potentially lower base rent
• Greater control over property-related expenses

Modified Gross (MG) Lease

The Modified Gross (MG) lease is a hybrid between the Triple Net and Full Service leases. In an MG lease, both the landlord and tenant share the responsibility for property expenses. Typically, the landlord covers some operating expenses, such as property taxes or insurance, while the tenant handles other costs like utilities and janitorial services. This lease offers a balance, providing predictability in base rent while allowing tenants to manage some of their expenses.

Key Benefits for Landlords:

• Shared responsibility reduces overall risk
• Stable and predictable base rent income

Key Benefits for Tenants:

• Predictable base rent
• Flexibility to influence operational expenses

Full Service (FS) Lease

A Full Service (FS) lease, also known as a gross lease, includes all property expenses within the base rent. The landlord covers property taxes, insurance, CAM, utilities, and other operational costs. For tenants, this lease option provides simplicity and predictability, requiring only a single, all-inclusive rent payment. It is attractive for tenants who prefer not to manage property expenses and want to avoid unexpected costs.

Key Benefits for Landlords:

• Simplified billing and expense management
• Ability to attract tenants seeking convenience

Key Benefits for Tenants:

• All-inclusive rent payment simplifies budgeting
• No need to manage or budget for property expenses