Can a triple net lease have a base year?

Can a triple net lease have a base year?

A triple net lease (NNN) is a lease where the landlord passes through all of the expenses associated with the property to the tenant – expenses like property tax, maintenance and utilities. Each year in the future the tenant is then responsible for their share of increased expenses beyond the base year level.

What is the landlord responsible for in a triple net lease?

With a Triple Net Lease—sometimes referred to as “NNN”—the tenant assumes responsibility for all costs of the property, in addition to paying the rent. The tenant pays the utilities, real estate taxes, building insurance, and maintenance.

What is a triple net commercial lease agreement?

The triple net (NNN) commercial lease agreement is a real estate contract for non-residential property between landlords and a business tenant.

Why is the base rent lower on a triple net lease?

The base rent— payable for the space itself—is generally lower because of the additional expenses the tenant must bear. All maintenance costs, on the other hand, remain the responsibility of the landlord, who pays for them directly. Single net (N) leases are not as common.

What does Starbucks do with the money from a triple net lease?

You then use this money to pay the mortgage if there is one, and everything left over is your cashflow. That is what we call a triple net lease, where Starbucks does not own the building, they’re just the tenant, and they pay you a lease payment and cover all of the expenses.

Why are triple net leased properties a good investment vehicle?

Triple net leased properties have become popular investment vehicles for investors because they provide low-risk steady income.

The triple net (NNN) commercial lease agreement is a real estate contract for non-residential property between landlords and a business tenant.

The base rent— payable for the space itself—is generally lower because of the additional expenses the tenant must bear. All maintenance costs, on the other hand, remain the responsibility of the landlord, who pays for them directly. Single net (N) leases are not as common.

How are personal property taxes charged on a triple net lease?

SECTION 3: PERSONAL PROPERTY TAXES. Tenant will pay directly all taxes charged against trade fixtures, furnishings, equipment, inventory or any other personal property belonging to Tenant. Tenant will use its best efforts to have personal property taxed separately from the Premises.

Why are double net leases so popular in real estate?

Double net leases are especially popular in commercial real estate. In a lease like this, the tenant pays property taxes and insurance premiums in addition to the rent. The base rent payable for the space itself is generally lower because of the additional expenses the tenant must bear.