Triple net (NNN), double net, single net and gross leases explained
Commercial rents are quoted different ways. The lowest quoted rent isn't always the cheapest once taxes, insurance and maintenance are added.
Updated Oct 29, 2026
Ways to split the costs
Every commercial building has three big operating costs, often called the “nets”: property taxes, building insurance and common area maintenance (CAM), the upkeep of shared spaces like the parking lot, landscaping, lighting and snow removal. The lease type decides who pays them.
- Gross lease (or full service): the tenant pays one rent and the landlord pays the costs. Common for offices.
- Modified gross: the tenant pays rent plus some costs. What's included varies by lease; often it's CAM or utilities, or only increases over a base year.
- Single net (N): the tenant pays rent plus property taxes. Not very common.
- Double net (NN): the tenant pays rent plus taxes and insurance; the landlord pays CAM and usually the roof and structure.
- Triple net (NNN): the tenant pays base rent plus its share of all three nets. Common for retail and industrial.
Tenant's all-in cost = base rent + the costs the lease passes through
A worked example
A 2,500 square foot retail space. Taxes are $4.50, insurance $1.20 and CAM $3.80 per square foot per year, $9.50 in all. The landlord quotes each lease type:
| Gross: $32.00 rent, nothing else | $32.00 |
|---|---|
| Modified gross: $27.00 rent + $3.80 CAM | $30.80 |
| Single net: $27.25 rent + $4.50 taxes | $31.75 |
| Double net: $26.00 rent + $5.70 taxes and insurance | $31.70 |
| NNN: $22.00 rent + $9.50 in nets | $31.50 |
| Gross | $6,667/mo |
|---|---|
| Modified gross | $6,417/mo |
| Single net | $6,615/mo |
| Double net | $6,604/mo |
| NNN | $6,563/mo |
The NNN rent of $22 looks far cheaper than $32 gross, but the real difference is $0.50 per square foot, about $104 a month. Here the modified gross lease is cheapest for the tenant. The landlord keeps $22.50 per square foot under the gross lease, $21.30 under modified gross, $22.25 under single net, $22.20 under double net and $22.00 under NNN.
Who carries the risk
The bigger difference is what happens when costs rise. Under a NNN lease, a jump in property taxes or insurance lands on the tenant. Under a gross lease, the landlord absorbs it until the lease renews. That's why investors pay more (a lower cap rate) for buildings with long NNN leases: the income is more predictable.
Things to check in a NNN lease
- Estimates and reconciliation. Tenants usually pay estimated nets monthly, then the landlord compares them with actual costs once a year and bills or refunds the difference.
- Your share. Usually your square feet ÷ the building's, called your pro-rata share.
- What CAM includes. Management fees, capital repairs like a new parking lot, and caps on yearly increases all vary by lease.
- Roof and structure. In an “absolute” NNN lease the tenant pays for those too.
Compare offers with your own numbers in the NNN vs gross lease calculator.
Frequently asked questions
- What does NNN mean in a lease?
- Triple net. The tenant pays base rent plus its share of the three 'nets': property taxes, building insurance and common area maintenance (CAM).
- Is a NNN lease better for the tenant or the landlord?
- Usually the landlord, because the tenant takes on the risk of rising taxes, insurance and maintenance. But NNN base rents are lower, so the total can be close to or below a gross lease, as the example shows.
- How do I convert NNN rent to gross rent?
- Add the nets. A $22 NNN rent with $9.50 of taxes, insurance and CAM is about $31.50 gross. To compare with a monthly figure, multiply by square feet and divide by 12.
- What's the difference between single net, double net and triple net?
- How many of the three building costs the tenant pays on top of rent: single net adds property taxes, double net adds taxes and insurance, and triple net adds taxes, insurance and common area maintenance (CAM).
- What's the difference between modified gross and full service gross?
- Under full service gross the landlord pays all operating costs. Under modified gross the tenant pays some of them, such as CAM, utilities or janitorial, or cost increases above a base year.
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For education only. Not financial, tax or legal advice; talk to a qualified professional about your situation.