Types of Commercial Real Estate Leases

Commercial leases come in different structures based on how rent and expenses are divided between landlords and tenants. The three primary types of leases—Gross Lease, Net Lease, and Modified Gross Lease—each have unique benefits and cost structures. Understanding these options ensures that landlords and tenants enter agreements that align with their financial and operational goals.

Gross Lease (Full-Service Lease)

In a Gross Lease, tenants pay a single fixed rent amount, and the landlord covers most or all operating expenses, including property taxes, insurance, and maintenance. This lease type offers **predictability** for tenants but places more financial responsibility on the landlord.

Net Lease

A Net Lease requires tenants to pay a lower base rent but also contribute to property expenses. These leases vary based on the number of costs tenants are responsible for:

• Single Net Lease (N Lease): Tenant pays base rent plus a portion of property taxes.
• Double Net Lease (NN Lease): Tenant covers rent, property taxes, and property insurance.
• Triple Net Lease (NNN Lease): Tenant pays rent plus property taxes, insurance, and maintenance costs.
• Absolute Triple Net Lease: The most landlord-friendly lease, where tenants assume full responsibility for all property expenses and risks.

Modified Gross Lease

A Modified Gross Lease blends elements of both Gross and Net Leases. The tenant pays one lump sum for rent that may include certain "net" expenses like taxes and insurance, while utilities and janitorial costs are typically excluded. This type of lease allows for **greater flexibility in negotiations** between landlords and tenants.

Finding the Right Lease for You

Understanding these lease types is crucial for structuring agreements that protect financial interests. Whether you’re a landlord looking to maximize property income or a tenant seeking the best lease terms, **Realty One Group Commercial** is here to guide you through the process.

Our lease negotiation services include **comprehensive market analysis** to ensure rental rates align with market conditions, tenant expectations, and landlord profitability. We specialize in securing lease terms that protect your best interests.

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