Triple Net Lease

Under a triple net lease, often written as NNN lease, the tenant takes on most of the costs and responsibilities of the property. The landlord receives rent with relatively few deductions, making the income more predictable.

Other lease types allocate costs differently. In a gross lease, the landlord pays most property costs out of a higher rent. In single net and double net leases, the tenant pays some, but not all, of the three main costs.

For example, a retail chain might lease a standalone store under a 15-year triple net lease, paying a fixed rent plus all property taxes, insurance and maintenance.

Triple net leases are common in the United States for single-tenant commercial properties, such as shops, restaurants, pharmacies, warehouses and bank branches. Investors value them for their stable, bond-like income. The main risk is the tenant’s financial strength, since the income depends on one tenant continuing to pay. In the United Kingdom, a similar arrangement is called a full repairing and insuring lease.