NNN vs gross lease calculator
A lower quoted rent isn't always cheaper. Compare gross, modified gross, single net, double net and triple-net (NNN) leases to see what a tenant really pays and what the landlord really keeps.
What this answers: Under a gross, modified gross or triple-net lease, what will the tenant really pay each month, and what does the landlord actually keep?
Start from an example, then change any number:
The modified gross lease costs the tenant the least: $30.80/sq ft a year all-in, about $3,000 a year less than the gross lease. The landlord keeps the most under the gross lease ($22.50/sq ft). A $22.50 NNN rent would leave the landlord exactly where the gross lease does.
- Gross$6,667
- Modified gross · cheapest$6,417
- Single net (N)$6,615
- Double net (NN)$6,604
- Triple net (NNN)$6,563
- Gross · most$56,250
- Modified gross$53,250
- Single net (N)$55,625
- Double net (NN)$55,500
- Triple net (NNN)$55,000
- Taxes + insurance + CAM
- $9.50/sq ft
- Gross all-in
- $32.00/sq ft
- Modified gross all-in
- $30.80/sq ft
- Single net (N) all-in
- $31.75/sq ft
- Double net (NN) all-in
- $31.70/sq ft
- Triple net (NNN) all-in
- $31.50/sq ft
Who pays what, per square foot per year
- Gross$32.00 rent$32.00
- Modified gross$27.00 rent + $3.80 CAM$30.80
- Single net (N)$27.25 rent + $4.50 taxes$31.75
- Double net (NN)$26.00 rent + $4.50 taxes + $1.20 insurance$31.70
- Triple net (NNN)$22.00 rent + $4.50 taxes + $1.20 insurance + $3.80 CAM$31.50
| Cost | Gross | Modified gross | Single net (N) | Double net (NN) | Triple net (NNN) |
|---|---|---|---|---|---|
| Base rent | $32.00 | $27.00 | $27.25 | $26.00 | $22.00 |
| Property taxes | Landlord | Landlord | + $4.50 | + $4.50 | + $4.50 |
| Insurance | Landlord | Landlord | Landlord | + $1.20 | + $1.20 |
| CAM | Landlord | + $3.80 | Landlord | Landlord | + $3.80 |
| Tenant total | $32.00 | $30.80 | $31.75 | $31.70 | $31.50 |
How this is calculated
- 1Pass-through costs = property taxes + insurance + CAM, per square foot per year.
- 2Gross lease: the tenant pays only the rent. The landlord keeps rent − all pass-through costs.
- 3Modified gross: the tenant pays rent + its share of CAM. The landlord pays taxes, insurance and the rest of CAM.
- 4Single net (N): the tenant pays rent + taxes. Double net (NN): rent + taxes + insurance. The landlord pays whatever the tenant doesn't.
- 5Triple net (NNN): the tenant pays rent + taxes + insurance + CAM. The landlord keeps the rent.
- 6Every lease: the landlord also pays its unrecovered costs. Yearly totals = per-square-foot amounts × square feet; monthly = yearly ÷ 12.
Modified gross leases vary a lot: some pass through utilities or janitorial instead of CAM, and many use a base year in which the tenant pays only increases over the first year's costs. Read the lease's expense clause. Under NNN, rising taxes and insurance land on the tenant; under gross, on the landlord.
Words to know
- Gross lease (full service)
- One rent covers everything. The landlord pays taxes, insurance and upkeep. Common for offices.
- Modified gross lease
- In between: the tenant pays rent plus some costs, often CAM, utilities or increases over a base year.
- Triple net (NNN) lease
- The tenant pays rent plus its share of the three "nets": property taxes, insurance and CAM. Common for retail and industrial.
- Single net (N) lease
- The tenant pays rent plus property taxes. The landlord pays insurance and upkeep. Not very common.
- Double net (NN) lease
- The tenant pays rent plus taxes and insurance. The landlord pays CAM, and often the roof and structure.
- CAM (common area maintenance)
- Upkeep of shared spaces: parking lot, landscaping, snow removal, lighting, cleaning and repairs.
- $ per square foot per year
- How commercial rent is usually quoted. $24/sq ft/yr on 2,000 sq ft is $48,000 a year, or $4,000 a month.
- Unrecovered costs
- Costs the landlord can't bill to tenants under the lease, such as roof reserves, leasing commissions or vacancy costs.
Frequently asked questions
- Where do I get the NNN charges for a space?
- Ask the landlord or broker for the current estimate of taxes, insurance and CAM per square foot, and last year's actual reconciliation.
- Is NNN rent quoted per year or per month?
- Usually per square foot per year. Multiply by the square feet and divide by 12 for the monthly amount.
- What are single net and double net leases?
- Steps between gross and triple net. Under single net (N) the tenant pays rent plus property taxes; under double net (NN), rent plus taxes and insurance. In both, the landlord still pays CAM. Definitions vary a little by region, so check the lease.
- What is a modified gross lease?
- A lease where the tenant pays rent plus some of the operating costs. Which ones varies by lease, so this calculator lets you set the tenant's share of CAM.
- Can I compare two different spaces with this?
- Yes. Run the calculator once per space and compare the all-in cost per month. Use the share link or Save this deal to keep each one.
- Do NNN charges include utilities?
- Usually not. Tenants typically pay their own space's utilities on top, under any lease type. Add them to your budget separately.