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Gross Lease vs. Triple Net Lease: What’s Better for Your Southern California Business?

  • Writer: gloryanng8
    gloryanng8
  • Aug 8
  • 2 min read

Choosing the right lease type is one of the most important financial decisions your Southern California business will make. The two most common lease structures—Gross Lease and Triple Net (NNN) Lease—have distinct financial implications. Whether you're leasing space in Los Angeles, Orange County, or San Diego, understanding these differences can save you thousands of dollars a year.

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What Is a Gross Lease?

A Gross Lease is an all-inclusive lease where the landlord covers most property-related expenses, including:

  • Property taxes

  • Insurance

  • Maintenance

  • Common area utilities

As a tenant, you pay a single, predictable monthly amount.


What Is a Triple Net (NNN) Lease?

A Triple Net Lease makes the tenant responsible for the three "nets":

  1. Property taxes

  2. Building insurance

  3. Maintenance costs

The rent is typically lower than a gross lease, but you're responsible for more out-of-pocket expenses.


Comparison Chart: Gross Lease vs. Triple Net Lease in Southern California

Feature

Gross Lease

Triple Net Lease (NNN)

Monthly Rent

Higher, fixed

Lower base rent, variable expenses

Who Pays Property Taxes?

Landlord

Tenant

Who Pays Insurance?

Landlord

Tenant

Who Pays Maintenance?

Landlord

Tenant

Budget Predictability

Very predictable

Less predictable

Common in

Office buildings

Retail, industrial, medical properties

Best For

Tenants who prefer fixed costs

Tenants who want long-term savings

Pros and Cons of Each Lease Type

✅ Pros of Gross Lease

  • Easier budgeting

  • No surprise maintenance bills

  • Great for smaller businesses

⚠️ Cons of Gross Lease

  • Higher monthly rent

  • Less control over how landlord manages property expenses

✅ Pros of Triple Net Lease

  • Lower base rent

  • More control over property standards

  • Good for long-term or high-traffic tenants

⚠️ Cons of Triple Net Lease

  • Exposure to rising taxes and insurance

  • Maintenance responsibility can be costly


Which Lease Is Better for Your Southern California Business?

If your business thrives on budget certainty and predictability, a gross lease may be ideal. If you're seeking long-term value and don't mind shouldering additional costs, a triple net lease could offer better flexibility.


FAQ: Gross vs. NNN Lease in SoCal

Q: Are triple net leases more common in Southern California?

A: Yes, especially for retail and industrial properties in cities like Irvine, Torrance, and Anaheim.

Q: Can I negotiate CAM (common area maintenance) in an NNN lease?

A: Absolutely. Always request a breakdown and audit rights before signing.

Q: Is a gross lease more expensive overall?

A: Not necessarily. It depends on how much taxes, insurance, and maintenance would cost you separately.


Southern California's commercial real estate market is competitive, and choosing the right lease structure can give your business a financial edge. Always consult a qualified broker or real estate attorney before signing.

 
 
 

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