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Triple net lease
In a triple net lease, the tenant pays for building maintenance, property insurance, and property tax in addition to monthly rent.
What is a triple net lease?
A triple net lease, often written as NNN, is a commercial lease where the tenant pays three major property expenses in addition to base rent.
This means your true cost of renting a space isn’t just the monthly rent—it’s your total cost of occupancy.
Triple net leases are common in retail, medical office, and industrial spaces. They’re especially attractive to landlords because they shift many financial responsibilities to the tenant.
What's included in a triple net lease?
With a triple net lease, you typically pay:
- Base rent
- Property taxes (your share, based on square footage)
- Property insurance (for the building and liability)
- Maintenance and repairs
- Common area maintenance (CAM) if the property has shared spaces
It's important to remember these costs can increase over time, even if your rent stays the same.
What is common area maintenance?
Common area maintenance (CAM) refers to the costs of maintaining shared spaces in a commercial property, which are often passed on to tenants in net and triple net leases.
CAM charges may include:
- Parking lot maintenance
- Snow removal
- Landscaping
- Lighting
- Security
- Trash and janitorial services
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What triple net leases really cost small businesses
Triple net leases often advertise a lower base rent, but that doesn’t mean they’re cheaper.
The table below shows example monthly costs for a small retail business—like a florist, coffee shop, or neighborhood service shop—comparing a gross lease to a triple net lease.
| Lease type | Gross lease | Triple net |
|---|---|---|
Base rent | $2,500 | $1,800 |
Taxes | $0 | $400 |
Insurance | $0 | $200 |
Maintenance | $0 | $300 |
Total monthly cost | $2,500 | $2,700 |
For example, a small retail business leasing space in a strip mall might see a lower advertised rent under a triple net lease, but once property taxes, building insurance, and CAM fees are added in, the monthly cost can actually be higher than a traditional gross lease.
This is especially common for businesses like consignment shops, salons, fitness studios, fast food restaurants, and bakeries that share parking lots, signage, and outdoor spaces with other tenants.
Even with a lower base rent, a triple net lease can end up costing more month to month.
What are the insurance responsibilities under a triple net lease?
In an NNN lease, the landlord typically requires you to carry your own insurance and often meet specific coverage limits. These policies protect both your business and the property owner from costly claims.
Common insurance requirements include:
- General liability insurance: Covers third-party bodily injury, property damage, and related legal costs. For example, it can pay for medical bills and legal defense if a customer slips and falls in your space, if you accidentally damage the landlord’s property, or if someone is hurt in a shared area and sues your business.
- Commercial property insurance: Protects the physical assets your business owns, such as equipment and tools, furniture and fixtures, inventory and supplies, and computers and electronics. It typically covers losses caused by fire, theft, vandalism, and certain weather events, but it covers your property only—not the landlord’s building.
- Workers’ compensation insurance: Required in most states if you have employees, and it pays for medical treatment and partial lost wages when someone is injured or becomes ill because of their job. It also provides legal protection if your business is sued over a workplace injury, including injuries that happen inside your leased space.
- Business interruption insurance: Helps replace lost income if your business has to temporarily close due to a covered property loss, such as fire, smoke damage, water damage from a burst pipe, or storm-related destruction. It can also help cover ongoing expenses like rent, payroll, and utilities while you recover.
- Commercial umbrella insurance: Provides extra liability coverage on top of your existing policies. If your general liability policy has a $1 million limit and a claim ends up costing $1.5 million, umbrella insurance can help cover the difference.
Many leases require $1 million or more in liability limits, your landlord named as additional insured, and proof of coverage with a certificate of insurance (COI).
These requirements affect your insurance premiums and cash flow, so it’s smart to review them with a licensed agent before signing.
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What are some common risks in triple net leases?
NNN leases shift risk from the landlord to you. That means:
- Your costs can rise unpredictably
- Property taxes may increase
- Insurance premiums can go up
- Maintenance surprises (roof, HVAC, plumbing) can hit your budget
You may also see escalation clauses that raise expenses annually, long lease terms (10–25 years) with limited flexibility, and CAM fees that aren’t always transparent.
How to negotiate a small business-friendly NNN lease
Before you sign, protect your business by negotiating:
- Caps on annual expense increases
- CAM fee transparency and audits
- Clear maintenance responsibilities
- Insurance requirements you can realistically afford
- An attorney review of the lease terms
Even small changes can save you thousands over the life of a lease.
Triple net vs. other lease types
Not all commercial leases are created equal, and the way expenses are divided between you and the landlord can significantly affect your monthly costs.
Understanding how a triple net lease compares to other common lease types can help you see exactly how much financial responsibility you’re taking on as a tenant.
| Lease type | Who pays expenses? |
|---|---|
Gross lease | Landlord pays taxes, insurance, and maintenance |
Single net (N) | Tenant pays property taxes |
Double net (NN) | Tenant pays taxes and insurance |
Triple net (NNN) | Tenant pays taxes, insurance, and maintenance |
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Updated: January 27, 2026
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