What is Triple net or Net Net Cash?

Question

Hello everyone.  Newbie David here.  I need to ask a question and I bet there are people that can jump on in and tell me this information.  I could look it up but I thought I would just ask the question in here.

I see ads for properties that say Triple Net or Net Net Cash.  Can someone please give this Newbie a little help on this?  I am going to read several of the articles or post on here and see what they say, but I thought I would just ask the community.

Have a great weekend and thank you all for your help!!!

David

Sam Erickson · Answer

Just to Expand on Josh's answer if your in a NNN lease your payment is usually broken down into 2 amount. The first being your "base rent" this will most likely be a per sq ft amount that is the going market rate.

The other charge will be "additional rent" also called " CAM charges" (comman area maintenance).  This will be property specific and will be your share of the expense laid out by Josh above. Your share will be determined by the amount of space you rent in relation to the overall building size.  The landlord should not make a profit on these charges and the account should be reconciled at the end of each year based on actual charges. At the end of the year you may have to pay in more if they under estimated or if they over estimates you will get a credit.

Sam

Josh Caldwell · Answer

Tripple net lease is a term that you generally find only in commercial property.  What it means is that the tenant is responcible for paying everything.  The tenant pays for repairs and upkeep as well as taxes, insurance, utilities, and pretty much everything else that can be called an expense.

You will see this alot from chain restaurants.  they build out an store and then sell it and lease it back.

I hope that helps

Josh

David McBrayer · Answer

Thanks a million @John Caldwell.  That was short and sweet and what I needed.  Thank you for taking the time to answer my question.  Keep up the awesome work!!!  Sounds like a good deal for the one holding the leases.

David