NNN (Triple Net Lease)

Category: business

A lease agreement where the tenant promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance.

The NNN lease is the "hands-off landlord" model. The tenant pays a lower base rent, but takes on the total financial risk of running the building. It is standard for single-tenant retail buildings, fast-food franchises, and large industrial warehouses.

Common Examples

• The fast-food operator signed a 20-year absolute NNN lease, making them entirely responsible for the building’s structural maintenance.
• Institutional investors prefer NNN lease properties because they provide a highly predictable, bond-like stream of income.