Although commercial real estate leases take many forms, there are – generally speaking – two significant categories: “gross lease” and “net lease.” Gross is the lease category in which the landlord is responsible for ALL property expenses, including property taxes, insurance, and building maintenance. The tenant is only responsible for rent and often utilities.

Net, meanwhile, is the lease category in which the tenant assumes SOME or ALL of the costs for property taxes, insurance, and building maintenance (the three major property expense categories). Since the tenant is responsible for SOME or ALL property expenses, the landlord potentially has fewer management responsibilities.

When a tenant is responsible for ALL property expenses, industry professionals call this a “NNN” or “triple net lease.” When a tenant is responsible for two of the major expense categories, it is called “NN” or “double net.” When a tenant is responsible for one of the major expense categories, it is called “N” or “single net.”