NNN Calculation Examples (Plain English)
Triple Net (NNN) charges look simple — until you see how they’re actually calculated. Below are real-world examples showing how NNN costs are passed to tenants, and where mistakes and overcharges commonly occur.
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What Are NNN Charges?
NNN (Triple Net) charges typically include:
- Property taxes
- Property insurance
- Common Area Maintenance (CAM)
Tenants usually pay their pro-rata share of these expenses based on leased square footage.
Example 1: Simple NNN Calculation
Assumptions
- Total building size: 20,000 sq ft
- Your leased space: 2,000 sq ft
- Your pro-rata share: 10%
- Annual NNN expenses: $120,000
Calculation
$120,000 × 10% = $12,000 per year
Monthly NNN charge: $1,000
This is the clean version most tenants expect — but it’s rarely what actually happens.
Example 2: NNN With CAM Admin Fees
Added detail
- CAM portion: $60,000
- Admin fee: 15% of CAM
Admin fee added:
$60,000 × 15% = $9,000
New total expenses: $129,000
Tenant share (10%): $12,900 per year
Many leases cap or exclude admin fees — but they’re often added anyway.
Example 3: NNN Errors That Inflate Costs
- Incorrect square footage used
- Double-counted expenses
- Non-allowable costs included
- Insurance or tax spikes passed through improperly
- Reconciliation math errors
Even small errors can add up to thousands per year, especially because NNN charges recur annually.
Why Most Tenants Never Catch NNN Errors
- NNN calculations are buried in spreadsheets
- Lease language is vague or outdated
- Audit windows are short (often 30–90 days)
- Landlords rarely volunteer corrections
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