What is a triple net lease?

The three nets are the three costs moved to the tenant, which is why the rent is lower than on a lease where the owner pays them. These leases are common for single-tenant retail, industrial and office buildings, often for long terms. If the tenant leaves, the rent stops and the costs return to the owner.

Say a building costs $2 million a year to run instead of $1 million. Under a triple net lease paying $3 million in rent, the owner still receives $3 million.

The owner’s income is steadier against rising costs, but it leans heavily on that one tenant.