Question about multi-tenant NNN and vacancies (who pays?)
For a typical NNN lease, how is the contract structured regarding vacancies of other tenants? For a simplified example, say we have a 10 tenant building and each tenant is renting the exact same square footage. Each tenant is therefore playing 10% of the property tax as part of their net lease. Now let's say one tenant vacates and is not immediately replaced. Are the remaining tenants still paying 10% of the property taxes (90% total) with the owner paying the remaining 10% while the vacancy remains? Or do the 9 tenants now pay 11.11% towards the property taxes and the owner still pays nothing?
Most Popular Reply
The owner pays for vacancies. I don't own NNN properties (yet), but I certainly wouldn't sign a lease where other vacancies in a property that I have no control of increase my costs.