What is a 'triple-net lease' (NNN) in commercial real estate?
Correct Answer
A) A lease where the tenant pays base rent plus property taxes, property insurance, and common area maintenance costs
A triple-net (NNN) lease requires the tenant to pay base rent plus three categories of property expenses: property taxes, property insurance, and common area maintenance (CAM). This shifts most operating costs from the landlord to the tenant.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
A freehold estate conveys ownership rights, while a leasehold estate grants the right to possess and use property for a specific period without ownership.
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A commercial lease contains a 'rent escalation clause' that ties annual rent increases to changes in the Consumer Price Index (CPI). In a year when the CPI increases by 4 percent, what happens to the tenant's rent?
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A shopping center landlord requires a percentage lease clause from a major department store anchor tenant. The anchor tenant negotiates a natural breakpoint. What is a natural breakpoint?