DOUBLE NET LEASE
This is almost the same thing as a single net lease, with one more addition: the tenant is also responsible for property insurance, as well as the property taxes. It is built into the lease as well. Once again, the tenant is responsible for paying utilities and janitorial services on their own.
TRIPLE NET LEASE
This is the other common type of lease and you see it the most 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 that relates to the space. These expenses are estimated by the landlord and charged per the 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 leases are friendlier to the landlord than other types. They need to be carefully reviewed, especially in how much the fees can be raised annually. Since they fluctuate 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.
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