in a “net lease,” in addition to base rent, the tenant or lessee is responsible for paying, some or all of the recoverable expenses related to real-estate ownership.  even though nnn leased investments are considered to be highly risk-averse investments, especially when leased to a national credit tenant, the landlord is still exposed to some financial risk.  in one variation of a nnn lease contract, the “bondable nnn lease” (sometimes referred to as a “true triple net” or “absolute triple net” lease), the tenant cannot terminate the lease or seek any rent abatements under any circumstances, a provision that mitigates some of the risk for the landlord.
 a “bondable nnn lease”, the most extreme form of a nnn lease investment, is often used incorrectly in the net lease industry when referring to nnn properties which are merely occupied by investment-grade tenants. the value of a net leased investment is determined by the value of the real estate, the value of the credit tenant, and the value of the lease itself. many investors and developers prefer off-market transactions for a variety of reasons, one of which is controlling the publicity of the availability of the property, which could create issues with other lease negotiations on other deals.
a triple net lease is a tool commonly used to settle the question of which party pays which expenses. in a triple net lease, these costs become the legal and contractual responsibility of the tenant; the landlord passes the cost onto the tenant. with a triple net lease, the landlord passes on costs associated with the property to tenants. one of the beauties of triple net leases is that landlords can transfer nearly all of the costs and uncertainty onto tenants.
that’s why triple net lease tenants tend to stay in one location for long periods of time. vacancy can occur when a tenant moves out at the expiration of a lease and the landlord struggles to fill the vacated space, perhaps because overall market demand is weak, perhaps because of some shortcoming in the property itself. however, one tradeoff is that if lease rates spike, there’s not much the landlord can do to cash in on the more favorable market conditions. during the course of a triple net lease, the landlord is off the hook for maintenance and improvements. triple net leases are a commonly negotiated contract type, and they’re a widely accepted form of occupancy in the commercial real estate sector.
a triple net lease (triple-net or nnn) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, a triple net lease is an agreement between a property owner and a tenant where the tenant pays property taxes, insurance premiums, and maintenance upkeep and a triple-net (nnn) commercial lease agreement is a contract between a landlord and a tenant that pays for the three (3) ‘nets’,, .
the triple net lease, also called a “triple n,” places responsibility with the tenant for three payments in addition to the rent. the tenant pays for building a triple net lease, also known as an nnn lease, is a lease in which the tenant agrees to pay their pro-rata share of all expenses associated triple net leases, also called nnn leases, are legal contracts between a lessor and a lessee. in the agreement, the lessee tenant pays rent and a pro-rata share, .
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