Triple Net Lease (NNN)

Category: legal

A commercial lease agreement where the tenant pays all operating expenses, including property taxes, building insurance, and maintenance costs, in addition to base rent.

NNN leases shift virtually all operational and inflationary risk away from the landlord. These agreements are highly prized by institutional investors seeking passive, predictable income streams. The value of an NNN property relies heavily on the creditworthiness of the tenant (e.g., a national pharmacy chain vs. a local retailer).

Common Examples

• We reallocated our real estate equity into single-tenant triple net lease assets to insulate our cash flows from rising local insurance premiums.
• Under the terms of the triple net lease, the tenant was entirely responsible for the six-figure roof replacement cost following the storm event.