Commercial Lease Types Explained

Triple net (NNN) leases: tenant pays base rent, property taxes, insurance, and maintenance. Learn NNN expenses, red flags, and the 126 fields to abstract.

Typical term: 10–25 years

Modified gross leases split operating expenses between tenant and landlord. Learn expense allocation, base year provisions, and red flags to watch.

Typical term: 3–7 years

FSG leases include all operating expenses in one rent payment. Learn base year stops, gross-up provisions, and key red flags for office tenants.

Typical term: 5–10 years

Ground leases: tenant leases land, builds improvements, and loses them at expiration. Learn 50-99 year terms, leasehold financing, and red flags.

Typical term: 50–99 years

Percentage leases combine base rent and a cut of gross sales. Learn breakpoints, natural vs artificial, gross sales definitions, and red flags.

Typical term: 5–15 years

Single net leases: tenant pays base rent plus property taxes. Learn the difference from NNN and NN, expense allocation, and critical fields.

Typical term: 3–10 years

Double net leases: tenant pays rent, taxes, and insurance. Landlord keeps structural maintenance. Learn NN vs NNN differences and red flags.

Typical term: 5–15 years

Absolute net leases transfer all expenses to the tenant — zero landlord obligations. Learn bondable net leases, investment-grade tenants, and risks.

Typical term: 20–25 years

Gross leases: tenant pays one fixed rent, landlord covers all expenses. Learn differences from full service gross, NNN, and key lease terms.

Typical term: 1–5 years

Industrial gross leases: tenant pays rent and utilities, landlord covers structure and taxes. Learn warehouse lease terms and expense allocations.

Typical term: 3–10 years

Build-to-suit leases: developer builds to tenant spec, tenant commits for 15-25 years. Learn BTS structure, NNN operation, and critical abstractions.

Typical term: 15–25 years