A net lease, triple net lease or Net-Net-Net lease are synonymous with a type of commercial lease where the Tenant pays a “base rent” plus pass-through expenses related to the property as “additional rent.” The idea is the Landlord will not have any out-of-pocket costs relating to the leasing of the property. Typically, the pass-through costs include real estate taxes, insurance, maintenance and repairs. If the property has more than one Tenant then the maintenance of common areas, such as entrance areas, sidewalks, common rest rooms, parking lots, landscaping, lighting, cleaning are allocated based on a percentage of the area leased by a Tennant compared with the total leased area. These expenses are called “Common Area Maintenance” or CAM charges.
Triple net leases offer the Landlord consistent and predictable cash flow and management free real estate, when the properties are under a long term lease.