what is a nnn lease

A triple net lease, also known as an NNN lease, is a lease agreement in commercial real estate where the tenant is responsible for paying all operating expenses in addition to rent. These expenses typically include property taxes, insurance, and maintenance costs. Triple net leases are popular among investors because they have less financial and managerial responsibilities over the property, and they have less risk because the lessee covers much of any cost fluctuations, incentivizing the lessee to keep up the property. For tenants, triple net leases generally provide more freedom to make alterations and customize space without having to make the substantial capital investment of purchasing a property outright. Tenants may also be able to leverage the added financial responsibility to negotiate lower rents. Triple net leases are usually long-term, with the most common lengths being 10 or 15 years but can last much longer.