What is a "triple net lease"?

A "triple net lease" is defined by the tenant taking on additional financial responsibilities beyond just the base rent. In this type of lease, the tenant is responsible for paying property taxes, insurance, and maintenance costs related to the property, in addition to the standard rent amount. This arrangement shifts a significant portion of the operating costs of the property from the landlord to the tenant, which can be appealing for landlords seeking more predictable income without the burden of ongoing management expenses.

This structure is common in commercial real estate, especially in retail or industrial leasing, where the landlord prefers to reduce their financial risks and have a clear understanding of their expenses. By transferring these costs to the tenant, it allows for a more straightforward financial model, making it easier to negotiate lease terms and achieve a return on investment.