Property taxes
On a statement: Real estate tax bill
Check: The property included, your share, and any adjustments.
Commercial lease guide
Triple net leases, explained clearly.
A triple net (NNN) lease generally adds a tenant's share of property taxes, insurance, and common area maintenance to base rent. Your signed lease defines what belongs in each category and how your share is calculated.
The basic structure
Base rentThe amount set by the lease
+ Property taxesYour defined share
+ InsuranceYour defined share
+ CAMYour defined share
This is the common pattern. The signed lease controls the actual obligations.
The three expense groups
What makes an NNN lease “triple”?
A statement may group these costs separately. The category label does not establish that every billed amount is permitted; compare the detail with the lease.
Insurance
On a statement: Building insurance premium
Check: The policies covered and how the cost is allocated.
CAM
On a statement: Shared area and operating costs
Check: Allowed costs, exclusions, caps, and fees in the lease.
For a closer look at the third category, read our Common Area Maintenance guide.
Understanding your share
A small percentage can shape a large bill.
Some leases divide the tenant's rentable area by a defined building or project area. Others use a different denominator, cost pool, or allocation rule. Check the lease's exact formula before relying on any estimate.
Learn how tenant share works ↗Illustrative allocation
5,000 sq ft tenant space ÷ 50,000 sq ft defined area
= 10% tenant share
10% × $100,000 in allowed costs = $10,000
Arithmetic example only. Your lease may use a different area or calculation method.
Annual true-up
Why the annual bill can change.
Under many NNN arrangements, tenants pay estimates during the year. The annual statement compares those payments with the calculated share of actual costs, then shows a balance or credit.
Check the period covered, expense groups, share applied, and payments credited. The lease determines when and how an adjustment is handled.
Understand CAM reconciliation ↗Occupancy cost example
Base rent$25 / sq ft
Taxes$4 / sq ft
Insurance$1 / sq ft
CAM$6 / sq ft
Total$36 / sq ft
For 5,000 sq ft, this equals $180,000 per year. This is an arithmetic illustration, not a quote or forecast.
Before calling a charge an overcharge
Six questions worth checking.
01
Does the lease include or exclude the billed cost?
02
Does a cap or administrative fee limit apply?
03
Was a capital project treated as the lease requires?
04
Was the correct area, cost pool, and tenant share used?
05
Were estimated payments and credits counted?
06
What records and notice procedure does the lease provide?
A surprising charge is a reason to request backup, not proof of an error. Use the free CAM audit checklist to organize terms, questions, and records.
Keep learning
Explore related lease terms.
Your next step
See what your NNN lease actually says.
Start with a free lease preview. Add an annual statement if you have one, then decide whether the full report is useful after seeing the initial results.