What is triple net lease example?
A triple net lease is an agreement between a property owner and a tenant where the tenant pays property taxes, insurance premiums, and maintenance upkeep and repairs, in addition to a monthly rental fee of the building or space.
Why is it called a triple net lease?
In US parlance, a lease where all three of these expenses are paid by the tenant is known as a triple net lease, NNN Lease, or triple-N for short and sometimes written NNN. In a net lease, the property owner receives the rent “net” after the expenses that are to be passed through to tenants are paid.
What is NNN mean in real estate?
triple net lease
An NNN lease is the most common type of commercial lease and is commonly called a triple net lease. On an NNN lease, tenants pay additional expenses in addition to the lease fee, to the landlord or lessor. The NNN fees includes property taxes, property insurance and common area maintenance for a building (CAM).
Is Triple Net paid monthly?
The most obvious benefit of using a triple net lease for a tenant is a lower price point for the base lease. Since the tenant is absorbing at least some of the taxes, insurance, and maintenance expenses, a triple net lease features a lower monthly rent than a gross lease agreement.
How much is triple net usually?
It is typical to see a $3 a square foot NNN cost in my area, which would add $15,000 a year or $1,250 a month to the costs. Your base lease rent of $4,166.67 could easily turn into $6,000 a month actual cost.
What is PSF rent?
PSF. This means Per Square Foot and is the traditional measurement of annual rent. RENTS. It is common for rents to be described as a flat monetary value.
Is NNN paid monthly or yearly?
Example of Calculating Monthly Rent in a NNN Lease The estimated operating expenses (aka NNN) are $10 per square foot per year. The total yearly rent you would pay equals $40 sf per year. So if you are leasing 3,000 sf then your yearly rent would be $120,000 or $10,000 per month.
How is NNN paid?
NNN stands for net, net, net. It means that the tenant pays most of the expenses. They pay the rent fees plus property taxes, property insurance, and CAM, or common area maintenance. The NNN fees are added onto the base rental fee, which is usually calculated as a dollar-per-square-foot number like $15.
How is PSF rent calculated?
Cost Per Square Foot To calculate the usable cost-per-square-foot, you need to divide the total rent for the office or shop space you will be occupying by the total usable square footage. For example, if you’re renting a 500 square foot space for $1,500 a month, you will be paying $3 per-square-foot.
How is PSF calculated?
Pounds per square foot can be abbreviated as psf; for example, 1 pound per square foot can be written as 1 psf. Pressure in pounds per square foot are equal to the pound-force divided by the area in square feet.
What is the definition of a triple net lease?
Definition: A Triple Net Lease, also called an NNN lease or net net, is a real estate lease that transfers the obligation to pay for all operating expenses to the tenant. In other words, the tenant will be solely responsible for paying the real estate taxes, insurance, and utilities of the property.
When do you get a refund on Triple Net?
These costs are usually estimated for the year and incorporated into the rent on a monthly basis. At the end of the year, if the costs were lower then the tenant gets a refund, and if more then the tenant will owe the difference.
How does a double net lease work in real estate?
A net lease is a real estate lease in which a tenant pays one or more additional expenses. In a single net lease, the tenant pays a lower base rent in addition to property taxes. Double net leases include property taxes and insurance premiums, in addition to the base rent.
Who is responsible for triple net in strip malls?
For example, if the tenant is located in a strip mall renting 10,000 square feet, while their space is only 1,000 square feet, the tenant would be responsible for 10% of the NNN expenses. Even though the tenant pays for the triple-nets through their monthly rent, the landlord will be the one actually making the payments.