Building trust by simplifying complex terms

38 days ago by ONB Properties

In the world of commercial real estate, the "sticker price" on a lease is rarely the whole story. I always tell my clients that the lease structure is just as important as the location. It determines your monthly overhead and who gets the surprise bill when the tax assessment or insurance premium spikes.

Here is the breakdown of the three most common lease types you'll encounter in the North Carolina market.

The Comparison Table: Who Pays for What?

The primary difference between these leases is how "net" the rent is to the landlord. In a Gross lease, the landlord handles the risk of rising costs; in a NNN lease, that risk shifts to you, the tenant.

1. Full-Service Gross Lease

Think of this as the "all-inclusive resort" of leasing. You pay one flat fee, and the landlord covers everything—taxes, insurance, maintenance, and often even utilities and cleaning.

2. Modified Gross Lease

This is the "happy medium" often found in office and industrial spaces. You pay a base rent that includes some of the building's operating costs, but you are typically responsible for your own utilities, janitorial services, and sometimes your share of cost increases after the first year (the "Base Year" concept).

3. Triple Net (NNN) Lease

This is the standard for retail and standalone buildings (like the sites I develop). You pay a lower base rent, but you also pay your pro-rata share of the "Three Nets": Taxes, Insurance, and Common Area Maintenance (CAM).