What does a Triple Net Lease require the tenant to pay?

A Triple Net Lease, often abbreviated as NNN lease, requires the tenant to cover not only the base rent but also all operating expenses associated with the property. This includes property taxes, property insurance, and maintenance costs. The rationale behind this type of lease is that it shifts many of the financial responsibilities of property ownership onto the tenant, which can be appealing to landlords as it provides them with a more predictable income stream and less administrative burden.

In this lease structure, the tenant becomes responsible for the costs that are typically incurred by the landlord, making it essential for them to understand the total financial commitment they are undertaking. This type of lease arrangement is common in commercial real estate, particularly in retail and industrial properties, since it allows for greater transparency in operating costs and encourages tenants to manage property expenses efficiently.