what is triple net lease

A triple net lease (NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance, in addition to rent and utilities. Triple net leases are commonly found in commercial real estate and tend to have lower rents because the tenant assumes ongoing expenses that would otherwise be the responsibility of the property owner. Other net leases include a single net lease, in which the tenant pays property taxes, and a double net lease, which includes property taxes and property insurance. Triple net leased properties have become popular investment vehicles for investors because they provide low-risk, steady income. Triple net leases are long-term, with the most common lengths being 10 or 15 years but can last much longer. While triple net leases offer benefits to both landlords and tenants, a lessee would have to cover unforeseen maintenance costs and tax increases unless the lessee and lenders agree to a cap on the amount the lessee would be responsible for.