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

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":
Property taxes
Building insurance
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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