A tenant paying base rent plus a share of taxes only holds a:
Correct Answer
B) Single net lease
Why this is correct: Lease types are defined by what operating expenses the tenant pays. In a single net (or net) lease, the tenant pays base rent plus property taxes. The original explanation correctly outlines the progression: single net adds taxes, double net adds taxes and insurance, triple net adds taxes, insurance, and maintenance. Why the other choices are wrong: A triple net lease requires the tenant to pay all three: taxes, insurance, and maintenance. A full service gross lease means the landlord pays all operating expenses. A percentage lease bases rent on the tenant's sales volume. Exam tip: Remember the sequence: N = Taxes, NN = Taxes + Insurance, NNN = Taxes + Insurance + Maintenance.
Why This Is the Correct Answer
Why this is correct: Lease types are defined by what operating expenses the tenant pays. In a single net (or net) lease, the tenant pays base rent plus property taxes. The original explanation correctly outlines the progression: single net adds taxes, double net adds taxes and insurance, triple net adds taxes, insurance, and maintenance. Why the other choices are wrong: A triple net lease requires the tenant to pay all three: taxes, insurance, and maintenance. A full service gross lease means the landlord pays all operating expenses. A percentage lease bases rent on the tenant's sales volume. Exam tip: Remember the sequence: N = Taxes, NN = Taxes + Insurance, NNN = Taxes + Insurance + Maintenance.
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Previous Question
In a discounted cash flow analysis, an appraiser uses a yield rate of 10% to discount projected cash flows but applies a terminal capitalization rate of 8% to estimate the reversion. Which statement best explains why these two rates differ?
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A retail center's rent roll shows $340,000 potential, 8% vacancy and collection loss, and $12,500 in reimbursements. EGI is: