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What does nnn mean in commercial real estate

NNN – Triple Net –This type of lease rate includes the base rental rate plus the three N's. One “N” stands for property taxes, one for property insurance, and the final “N” stands for common area maintenance (CAMs).

Is a triple net lease a good idea?

A triple net lease is a steady and consistent revenue stream. A triple net lease involves less management hassle since utility expenses, repair costs, taxes, and any property management costs and issues are the responsibilities of the tenant. This leaves the landlord more time to focus on their primary business.


Is a NNN property a good investment?

NNN Investments are Stable, Hands-off and Long-Term CRE Investments. Investing in NNN properties can be a great opportunity for investors looking for a long-term and stable investment that comes with reliable and consistent cash flow. There are plenty of options for NNN properties all around the country.

What does NNN mean in commercial?

A triple net or NNN property lease is an agreement between the tenant and the property owner where the tenant pays all of the expenses associated with the property such as insurance, maintenance, and taxes.


What are the pros and cons of a triple net lease?

A Table Of Contents On Triple Net Leases

  • Pros. Reliable Income Source. Tenant Controls Their Vision. Limits Overhead Costs. Passive Management Role. Equity Building Investment.
  • Cons. Earnings Cap. Vacancy Costs. Protecting Your Investment.

What does $25 NNN mean?

NNN stands for net, net, net. It means that the tenant pays most of the expenses. They pay the rent fees plus property taxes, property insurance, and CAM, or common area maintenance. The NNN fees are added onto the base rental fee, which is usually calculated as a dollar-per-square-foot number like $15.

How do you calculate NNN?

How is the NNN Lease Calculated? NNN leases are computed by multiplying the total annual property taxes and insurance for the area by the entire rental square footage of the building.

Frequently Asked Questions

Are triple net leases a good investment?

Triple net (NNN) lease investments are generally low-risk investments. They provide guaranteed monthly income and in some cases come with fixed increases, allowing you to own a tangible asset that you can sell at any time.

Why would someone agree to a triple net lease?

Benefits of a Triple Net Lease

The most obvious benefit of using a triple net lease for a tenant is a lower price point for the base lease. Since the tenant is absorbing at least some of the taxes, insurance, and maintenance expenses, a triple net lease features a lower monthly rent than a gross lease agreement.

Is Triple net good or bad?

A triple-net lease can provide a consistent source of income for the investor, and unknown or catastrophic property expenses will be passed on to the tenant, helping to protect any risks in the investment.

FAQ

What are the risks of a triple net lease?
What are the biggest risks of triple net property?

  • Dependence on a Single Tenant.
  • Dependence on a Single Location.
  • Limited Upside Potential.
  • Market Sensitivity.
  • Predictability.
  • Stability.
  • Simplicity.
  • Investment Grade Credit.
Are triple net leases worth it?
At first look, this arrangement may appear to favor the landlord heavily, but it can also be a good option for tenants under the right circumstances. So whether you're a landlord or a business looking to rent a property, triple net leases are an option worth considering when negotiating your rental contract.

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