Calculate the True Cost of a NNN Lease
A NNN (triple net) lease requires the tenant to pay base rent plus three operating expense categories: property taxes, building insurance, and maintenance/CAM. This calculator shows how to add all components to find your total occupancy cost.
By Angel Campa, Founder · Updated March 2026
The Formula
Total Annual Cost = Base Rent + Property Taxes + Insurance + CAM/Maintenance
All figures are annual. Divide by 12 for monthly cost. Per-square-foot figures should be multiplied by your leased square footage.
Worked Example
Example Inputs
| Leased Square Footage | 5,000 sq ft |
| Base Rent | $18.00/sq ft/year |
| Property Tax Pass-Through | $3.20/sq ft/year |
| Insurance Pass-Through | $0.85/sq ft/year |
| CAM/Maintenance | $2.40/sq ft/year |
Result
$122,250/year ($10,187.50/month)
Step-by-Step Breakdown
| Line Item | Value |
|---|---|
| Base Rent | $90,000/year |
| Property Taxes | $16,000/year |
| Insurance | $4,250/year |
| CAM/Maintenance | $12,000/year |
| Total Annual Cost | $122,250/year |
| Monthly Cost | $10,187.50/month |
| Effective Rate | $24.45/sq ft/year |
Frequently Asked Questions
What does NNN mean in a lease?
NNN stands for triple net. In a NNN lease, the tenant pays base rent plus three categories of operating expenses: property taxes, building insurance, and maintenance or common area maintenance (CAM) charges. The landlord's net income from the lease is the base rent, after the tenant covers these three expense categories.
Are NNN charges negotiable?
CAM charges are often negotiable. Tenants frequently negotiate a CAM cap (annual increase cap, typically 3–5%), exclusions from CAM (management fees, capital expenditures, leasing commissions), and audit rights to verify landlord expense calculations. Property taxes and insurance pass-throughs are based on actual costs and are less negotiable but are subject to the same audit rights.
How do I estimate NNN costs before signing a lease?
Request the landlord's most recent operating expense reconciliation statement, which shows actual prior-year costs broken down by category. Use those figures as the baseline for estimating current-year costs. Budget a 3–5% annual increase for CAM charges in subsequent years unless a cap is negotiated.
Related Resources
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