Understand Lease Structures
Understanding lease structures is key to closing deals; Triple net (NNN), gross, and modified gross leases differ significantly in who covers costs Holland & Knight.
Triple Net (NNN) leases typically have lower base rents but require tenants to cover property taxes, insurance, and maintenance. This shifts more financial responsibility onto the tenant, but can offer predictability in expenses. Gross leases, on the other hand, include all operating expenses in the base rent. Landlords handle those costs, offering tenants a simpler, all-inclusive payment, but potentially at a higher base rent. Modified gross leases are a hybrid, where the landlord and tenant share some operating expenses. These leases can be customized to fit specific needs, dividing responsibilities for expenses like property taxes or maintenance.
