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In commercial real estate, the triple net (NNN) lease is one of the most popular and profitable lease types. It’s a style of lease that requires the lessee pays for almost every fee and expense that the landlords would usually pay to cover a property.

Commercial real estate investors love these types of leases because they require significantly less work on the part of the owner. Tenants like these leases because they are able to connect to a good property without being forced to pay for the property themselves. But in triple net, there are a lot of financial charges – NNN charges that you’ll need to consider as both an investor and a lessee, because if these costs get to significant it may be difficult to collect rent.

Example Financial Charges in an NNN Lease

  • Repairs – Lessees are expected to pay for any property repairs, no matter the cost. In some cases some NNN leases have clauses that request assistance from the landlord if the costs are too significant, but it’s not common.
  • Cleaning – Tenant is expected to keep the property clean at their own expense. Any forms of general maintenance are paid for by the tenant.
  • Property Services – Lawn care, pest control, etc. are all common property services that are paid for by the lessee, not the property owner. Some may be required on the lease, but that is not common either.
  • Utilities – Heating and air conditioning, water, sewer, garbage, etc. are all paid for by the lessee. These are considered maintenance costs.
  • Property Insurance – Every type of relevant insurance is required and must be paid for by the lessee. In some cases the lessee may reimburse the property owner for insurance, so that the owner is able to choose insurers themselves.
  • Security – While not necessarily used by every property, any type of security or security system would be paid for out of pocket by the tenant.
  • Taxes and Fees – Finally, any property taxes or fees would also be paid for by the tenant. Once again, these may be reimbursements rather than direct payments, but the lessee is expected to cover them in a NNN lease.

In addition, many triple net leases involve clauses for that increase the costs by a percentage each year. This is designed to account for inflation. With triple net leases, it’s not common for rent and financial charges to be static. They will almost all increase by at least a set percentage each year, which the lessee needs to take into consideration in their budget.

Turning Payments Into Loans

Still, if you are able to find someone to rent your property on a triple net lease and they have a high credit rating, the result is a lessee that makes your property much more profitable. You can even turn that property into a triple net loan, which is a loan that lenders provide you in advance of your payments so that you’re able to cash out early, instead of waiting for rent to come in.

If you’re like to learn more about these loans, make sure you sign up with CRE Lender today. We’ve been linking commercial property owners with lenders that offer the best rates given your finances. Sign up with CRE Lender today to find out more.


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