What is NNN or plus building expenses mean and what do they cover
NNN (Triple Net)
When a lease says “NNN”, it means the tenant pays base rent plus their share of three main “nets” (building expenses):
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Property Taxes – their portion of the building’s annual real estate taxes.
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Property Insurance – coverage for the building itself (not the tenant’s personal business insurance).
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Common Area Maintenance (CAM) – costs to maintain shared spaces like parking lots, landscaping, hallways, elevators, lighting, cleaning, etc.
👉 So, NNN = Base Rent + Taxes + Insurance + CAM
“Plus Building Expenses” or “Plus Utilities”
If a lease says “plus building expenses”, it usually means the tenant pays:
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Base rent, plus their share of the operating expenses (similar to NNN items).
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Sometimes, it may also include utilities, janitorial services, or management fees — depends on how the landlord defines it.
Example
If the rent is $20 per sq ft NNN, and the NNN expenses are $6 per sq ft, your total cost would be $26 per sq ft per year.
Would you like me to show you a quick example breakdown of an office lease cost for, say, 2,000 sq ft so you can see how it adds up?
Perfect — here’s a simple example:
Office Lease Example
Space size: 2,000 sq ft
Base rent: $20 per sq ft (NNN)
NNN expenses: $6 per sq ft
Step 1: Base Rent
2,000 sq ft × $20 = $40,000 per year
Step 2: NNN Expenses
2,000 sq ft × $6 = $12,000 per year
Step 3: Total Annual Rent
$40,000 + $12,000 = $52,000 per year
Step 4: Monthly Rent
$52,000 ÷ 12 = $4,333 per month
What’s in the $6 (NNN)?
Typical breakdown:
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Property Taxes: $2.50/sf
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Insurance: $0.50/sf
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CAM (Common Area Maintenance): $3.00/sf
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Includes landscaping, exterior lighting, repairs, cleaning of shared areas, management fees, etc.
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Perfect — here’s a simple example:
Office Lease Example
Space size: 2,000 sq ft
Base rent: $20 per sq ft (NNN)
NNN expenses: $6 per sq ft
Step 1: Base Rent
2,000 sq ft × $20 = $40,000 per year
Step 2: NNN Expenses
2,000 sq ft × $6 = $12,000 per year
Step 3: Total Annual Rent
$40,000 + $12,000 = $52,000 per year
Step 4: Monthly Rent
$52,000 ÷ 12 = $4,333 per month
What’s in the $6 (NNN)?
Typical breakdown:
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Property Taxes: $2.50/sf
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Insurance: $0.50/sf
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CAM (Common Area Maintenance): $3.00/sf
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Includes landscaping, exterior lighting, repairs, cleaning of shared areas, management fees, etc.
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Would you like me to show how this would look in a lease quote or proposal (like what you’d send to a tenant or landlord)?
You said:
yesChatGPT said:
Here’s an example of how you could present it clearly and professionally in a lease quote or proposal email or flyer:
Office Lease Proposal – Example
Property:
Available Space: 2,000 SF
Lease Type: NNN (Triple Net)Financial Summary
Description Rate (per SF) Annual Monthly Base Rent $20.00 $40,000 $3,333 NNN Expenses (Taxes, Insurance, CAM) $6.00 $12,000 $1,000 Total Rent $26.00 $52,000 $4,333 Additional Details
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Term: 3–5 years
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Tenant Pays: Utilities, janitorial, interior maintenance
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Landlord Pays: Structural, roof, exterior, landscaping
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Parking: Ample surface parking included
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Highlights: Newly renovated common areas, upgraded flooring, and easy access to I-95 and shopping
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