In commercial real estate, a triple net lease requires the tenant to pay rent, property taxes, insurance, and maintenance costs.
The name comes from the three major expense categories passed to the tenant: real estate taxes, building insurance, and maintenance. Base rent is paid separately, so the tenant’s total occupancy cost includes both rent and these operating expenses.
Triple net leases are especially common for freestanding retail stores, restaurants, warehouses, and other properties occupied by a single business. They are often long-term agreements because tenants may want predictable control over a dedicated building.
A gross lease works differently: the landlord generally pays most property operating expenses. A percentage lease, common in shopping centers, adds a sales-based payment to base rent. A ground lease concerns the use of land, rather than the usual operating-cost structure.