What Is Triple Net Leasing (NNN) and How Does It Work?

A triple net lease is a special deal where a business rents a building, but instead of just paying for the space, they also agree to pay for some extra things. These extra things can be:

Taxes: The cost of the land or building that the landlord has to pay.
Insurance: The cost to protect the building from accidents or disasters.
Repairs: The cost to fix anything that breaks in the building, like a broken door or leaky roof.
So, in a triple net lease, the business doesn’t just pay rent—they also help pay for these extra costs!

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How Does It Work?

Let’s pretend there’s a business that wants to rent a store in a mall. The landlord (the person who owns the building) might ask for a triple net lease. Here’s how it works:

Rent: The business pays money every month to rent the store, just like you’d pay rent to live in a house.
Extra Costs: On top of the rent, the business also agrees to pay for things like taxes, insurance, and repairs.
The landlord is happy because they don’t have to pay for those extra costs. The business is happy because the rent might be a little cheaper, and they get to take care of things the way they want!

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Why Do Businesses Use Triple Net Leases?

Some businesses like using triple net leases for a few reasons:

Lower Rent: Because the business is paying the extra costs, the landlord might ask for less rent. This helps businesses save money.
More Control: The business can fix things they want to fix, like the garden or the lights, instead of waiting for someone else to do it.
Long-Term Savings: If the business takes care of things themselves, they might save more money over time.

Who Benefits from a Triple Net Lease?

Landlords: The landlord doesn’t have to worry about paying for things like taxes or repairs. The business takes care of that.
Businesses: Businesses might pay less in rent and get to manage the property the way they want. It also helps them plan better for the extra costs.

If you’re interested in finding the right space for your business, or need a loan to get started, check out Private Capital Lenders for more information. We’re here to help you!