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Q.What is the difference between a gross lease and a triple net lease?
A.A gross lease is a commercial lease that provides a flat rental fee per month, without any pass-through additional costs to the tenant. A triple net lease is another form of commercial lease that provides a base monthly rental fee plus additional amounts based on the percentage of space within the building the tenant leases. A typically "triple net lease" passes onto the tenant the following three groups of charges: (1) common area maintenance expenses, (2) the landlord's real property taxes, and (3) the landlord's property insurance. With a triple net lease, if a tenant occupies 10% of a building, in addition to the base monthly rent, the tenant would pay 10% of the landlord's combined total annual costs for the above three items. These additional charges are generally amortized into 12 equal monthly payments, to be paid along with the base rent. When comparing places to lease, it is important to know exactly what will be included in the triple net pass through charges, and the average amount that will be paid in addition to the base rent.
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