The categorization of expense sharing.
By Angel Campa, Founder · Updated March 2026
The lease structure (NNN, gross, modified gross, absolute net) fundamentally determines the tenant's total occupancy cost. A $20/RSF NNN lease with $12/RSF in operating expenses costs $32/RSF total, while a $30/RSF gross lease may be cheaper overall. Misidentifying the structure during abstraction leads to drastically wrong financial projections and makes lease-to-lease comparisons unreliable.
Usually stated in the first few pages or in the "Rent" section. Look for explicit designations like "Triple Net," "Full Service Gross," or "Modified Gross." Sometimes the structure must be inferred from the operating expense pass-through provisions.
Lextract uses a combination of AWS Textract OCR and Claude AI to identify and extract the lease structure from your lease PDF. The AI searches for all pages of the document, then assigns a confidence score based on OCR quality and extraction certainty. Fields with lower confidence are flagged for human review.
Lextract automatically checks this field against its 15-rule red flag engine. Issues detected for lease structure:
Pro Rata Share
The tenant's fractional responsibility for total building operating expenses.
Base Year
The foundational year used to calculate operating expense increases in gross leases.
CAM Cap %
The maximum allowable annual increase for controllable operating expenses.
CAM Cap Type
Specifies whether the CAM cap is cumulative and compounding or non-cumulative.
Gross-Up %
The assumed occupancy level used to extrapolate variable operating expenses.
Management Fee Cap
The maximum allowable percentage of gross revenues charged for property management.
In a NNN (triple net) lease, the tenant pays base rent plus their pro rata share of operating expenses, taxes, and insurance separately. In a gross lease, the landlord bundles these costs into a single rent payment. NNN leases have lower base rents but higher total cost variability.
A modified gross lease is a hybrid where some expenses are included in base rent (typically taxes and insurance) while others (like utilities and janitorial) are paid directly by the tenant. The specific allocation varies by lease and must be carefully reviewed.
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