TRIPLE NET LEASE
This is the other common type of lease. You see it most often in retail and restaurant locations. It includes property taxes, insurance, and common-area maintenance. The tenant can pay some or all of these costs on top of the base lease. The base rent is the lowest here, due to the other fees the tenant will end up paying. Common-area utilities and other operating expenses are included here as well. Any services the building provides will cost the tenant. The tenant pays every other cost to do with the space. These expenses are estimated by the landlord and charged per space percentage the tenant occupies. A tenant with 2,000 square feet of a 20,000 square foot building is responsible for 10% of the property taxes, common-area utilities, and insurance. These are friendlier to the landlord than other types of leases. They need to be carefully reviewed, especially how much the fees can be raised annually. Since it fluctuates from month to month, budgeting is tougher to forecast. The benefit is being able to see and change the operating costs if possible. Tenants can work to lower their utility bill or get a cheaper janitorial service. The transparency provides that opportunity. The cons of this are the variables you could be on the hook for. If the HVAC unit goes out, you’re responsible for it. You could also be exposed to a property tax hike as well.
ABSOLUTE TRIPLE NET LEASE
This less common option is much more binding than a normal triple-net lease. In this type of lease, the tenant is responsible
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