Commercial lease comparison
Triple net or gross? Follow the costs.
The difference is how a lease assigns and adjusts property operating costs. Compare the total payment, the terms behind it, and what can change after signing.
The short version
Triple net (NNN)
Base rent, plus separately defined shares of taxes, insurance, and CAM.
Gross
Rent typically includes some operating costs; adjustments may still be allowed.
The signed lease, not its label, defines the actual payment obligations.
Side by side
What changes between the two?
These are common patterns. Modified gross, base-year, and expense-stop clauses can make a gross lease look different from a fully inclusive rent arrangement.
Starting payment
NNN: Base rent plus separately billed expense shares
Gross: Rent that typically includes some operating costs
Taxes, insurance, CAM
NNN: Often charged to the tenant under lease terms
Gross: Often included in rent, subject to lease adjustments
Annual changes
NNN: Expense estimates and actual costs may change
Gross: Rent or expense adjustments may still apply
What to review
NNN: Expense definitions, share, caps, and reconciliation
Gross: Base year, expense stops, escalation, and exclusions
Look beyond base rent
Compare the total occupancy cost.
A lower base rent does not always mean a lower total payment. In an NNN lease, the tax, insurance, and CAM components can move with actual costs. In a gross lease, read the rent adjustment language before assuming the payment stays fixed.
The illustration shows how to add NNN components. It does not say a gross lease would cost the same amount.
Illustrative NNN cost
For 5,000 sq ft, that is $180,000 per year in this arithmetic example. Actual terms and costs vary.
Read the actual terms
Four questions for either lease.
The lease's expense language matters more than the shorthand name on the cover page.
Which costs are included?
Find the lease's exact definition of rent and operating expenses. A label like “gross” or “NNN” does not replace the written terms.
How can charges change?
Check annual estimates, reconciliation, base-year provisions, expense stops, and rent increases.
What limits apply?
Look for exclusions, caps, fee limits, gross-up rules, and treatment of capital costs.
How do you verify a bill?
Read the notice window and records-access terms, then compare the statement with invoices and allocation schedules.
Annual statements
If you receive a reconciliation, review it.
Compare the billed categories, allocation, credits, and any lease limits. A difference worth questioning needs supporting records before it becomes a verified error.
Keep learning
Explore related guides.
Your next step
Find the expense terms in your lease.
Start with a free lease preview to see the extracted terms and initial checks. Add an annual statement if you have one, then decide whether the full report is useful.