In commercial real estate leases in the United States, the tenant, rather than the landlord, is usually responsible for real estate taxes, maintenance, and insurance. In a “net lease”, in addition to base rent, the tenant or lessee is responsible for paying some or all of the recoverable expenses related to real-estate ownership. As the rent collected under a net lease is “net” after expenses are passed through to tenants to be paid, the rent tends to be lower than rent charged under a “gross lease”.
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Net lease types include single net, double net, and triple net leases, depending on the number of items they include. The term “net lease” is often used as a shorthand expression for any of these arrangements. The three most common expenses charged back are property taxes, insurance, and maintenance, often called the “three nets”.[1] A triple net lease that includes the three nets is particularly common and is often abbreviated in writing as “NNN lease” but is still pronounced as “triple net lease”.[2][3][4]

Variations

Single-tenant net lease

NNN leased investments are generally leased to one single tenant and are thus referred to as STNLs or Single Tenant Net Leases. A NNN lease investment can however have two or more tenants, and it would not be considered an STNL investment. An example of this would be a Starbucks & MetroPCS which share a building under two separate NNN leases, or a retail strip center where all tenants are wrapped into one NNN lease. Both examples would be considered NNN leased investments