Types of Commercial Real Estate Leases
| Type of Lease | What Rent Includes | Type of Space |
| Triple Net Lease (NNN) | Monthly Base Rent + Tenants Share of Taxes, Insurance, Janitorial, Common Area Maintenance and Utilities | Any commercial lease; tenants should negotiate for favorable NNN terms |
| Fully Serviced Lease (FS) | Monthy Base Rent Only | Typcially higher end multi-tenant office space. Also common for subleases and shared spaces. |
| Percentage Lease | Monthly Base Rent + Percent of Monthly Sales | Retail Businesses, Malls |
Most Common Lease Types
Triple Net (NNN)The landlord pushes through all possible expenses to a tenant. The expenses include:
- Property Taxes: If a property sells or is reassessed, a small business can take a drastic hit to their rent expense. Try to negotiate a cap if possible on the potential increase.
- Building insurance: The small business pays for the landlord’s property insurance.
- Common Area Maintenance: Everything from security guards to landscaping to re-paving gets added into the number.
- Utilities: Some spaces are separately metered where you pay for your exact PG&E usage. If not, the landlord will bill you for your prorated share (your square footage/total building square footage).
- Janitorial: A cleaning crew that cleans your space and the common areas of the building.
Industrial Gross (IG)Small Business pays for its own Utilities and Janitorial. Landlord pays for everything elseFull Service (FS)Landlord is responsible for all expenses.