What Is a Triple Net Lease (NNN) and How Does It Work for Landlords?

If you’re a commercial property owner or planning to become one, you’ve probably come across the term Triple Net Lease or NNN lease. It's one of the most common lease types in the commercial real estate world—but many landlords and new investors don’t fully understand how it works or how it impacts their bottom line.

In this article, we’ll break down what a triple net lease really is, how it differs from other lease types, and the benefits (and risks) it brings to landlords.

What Is a Triple Net Lease (NNN)?

A triple net lease is a commercial lease agreement where the tenant is responsible for three key operating expenses:

• Property Taxes

• Insurance

• Maintenance and Repairs (CAM)

  
  

That’s in addition to their base rent. In short, the tenant takes on most of the property’s ongoing costs, giving the landlord a more predictable income stream and fewer day-to-day responsibilities.

How It Compares to Other Lease Types

Unlike a gross lease, where the landlord pays most or all operating expenses, a triple net lease shifts the majority of costs to the tenant. There’s also the modified gross lease, a hybrid model where expenses are shared.

Here’s a quick comparison:

Lease Type	Landlord Pays	Tenant Pays
Gross Lease	Most expenses	Base rent
Modified Gross Lease	Shared costs	Base rent + agreed expenses
Triple Net Lease	Very little	Base rent + taxes, insurance, CAM

Why Landlords Like NNN Leases

There are several reasons landlords favor triple net leases:

• Lower Risk: Operating costs like tax hikes or insurance increases are passed through to the tenant.

• Stable Income: Landlords receive a fixed rent without surprises.

• Minimal Management: Ideal for absentee or hands-off investors who don’t want to deal with repairs or utilities.

• Attractive for Investment: These leases are especially common with national tenants (like fast food chains or banks), making the property more valuable to other investors.

What to Watch Out For

Triple net leases aren't risk-free. Some things landlords should be aware of:

• Tenant Financial Strength: Since the tenant is covering expenses, their ability to pay is critical.

• Responsibility Confusion: Poorly written leases can cause disputes about who pays for what.

• Vacancy Risk: If the tenant leaves, you may be responsible for all those costs again until the space is leased.

  
  

That’s why it’s important to work with an experienced leasing team who can structure a lease that protects your investment and fits your long-term goals.

Is a Triple Net Lease Right for You?

If you own—or plan to acquire—commercial property, triple net leases can be a powerful tool to streamline operations and reduce risk. But they’re not a one-size-fits-all solution. Your property type, location, tenant mix, and investment timeline all play a role.

At RPM Real Estate Services, we help landlords across Los Angeles, the South Bay, Long Beach, and Las Vegas structure leases that work—for them and their tenants. We handle marketing, lease negotiation, and tenant screening with your long-term success in mind.

Ready to Structure a Smarter Lease?

📞 Contact RPM today to review your lease options or request a custom leasing strategy for your commercial property.