If you’ve ever looked at a commercial listing and seen “NNN” next to the rent, you’re not alone if your first question was: What does that actually mean for my monthly cost?
Triple Net (NNN) charges are one of the most misunderstood parts of commercial leasing, especially for small and mid-sized business owners. They’re also one of the biggest reasons tenants are surprised by their total rent after they move in.
Here’s what NNN charges are, what they typically include, and what you should understand before signing a lease.
What Does “Triple Net” Mean?
A triple net lease means that, in addition to base rent, the tenant pays for three operating expenses tied to the property:
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Property taxes
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Property insurance
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Common area maintenance (CAM)
Instead of the landlord bundling these costs into the rent, they are passed through to the tenant based on their share of the building.
That’s why NNN rent often looks cheaper at first glance — the operating costs are listed separately.
What’s Included in NNN Charges?
While the structure is consistent, the actual costs can vary by property.
1. Property Taxes
This is the tenant’s proportional share of real estate taxes assessed on the building. These can fluctuate year to year depending on reassessments or tax rate changes.
This is one reason NNN charges aren’t always a fixed number.
2. Property Insurance
This covers insurance on the building itself (not your business contents or liability). If insurance premiums increase, that increase is typically passed through to tenants.
3. Common Area Maintenance (CAM)
CAM charges cover shared spaces and systems, which may include:
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Parking lots
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Landscaping
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Exterior lighting
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Snow removal (where applicable)
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Common hallways or restrooms
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Property management and maintenance
CAM is usually the most variable part of NNN charges and the one that deserves the closest review.
How Are NNN Charges Calculated?
NNN charges are usually calculated per square foot and allocated based on the tenant’s share of the total building.
For example:
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If a building has 20,000 SF
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You lease 2,000 SF
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You’re responsible for 10% of the NNN expenses
Those costs are typically estimated annually and broken into monthly payments.
At the end of the year, there’s often a reconciliation to account for actual expenses versus estimates.
Are NNN Charges the Same Every Year?
No — and this is important.
NNN charges can increase due to:
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rising property taxes
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insurance premium increases
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higher maintenance or repair costs
Some leases include caps on certain CAM increases, while others don’t. This is where lease terms matter just as much as the number itself.
What’s a “Normal” NNN Rate?
NNN charges vary widely by:
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property type (office, retail, industrial)
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age and condition of the building
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location
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how the property is managed
As a rough general range:
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Office: $3–6/SF
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Retail: $4–8/SF
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Industrial: $2–5/SF
These are not guarantees — just typical ranges. The only number that matters is what applies to that specific property.
Why NNN Charges Matter More Than Base Rent
Two spaces with the same base rent can have very different total monthly costs once NNN charges are added.
That’s why focusing only on the advertised rent often leads to budget surprises later.
Understanding the all-in cost is far more important than chasing the lowest number on paper.
Questions Business Owners Should Ask About NNN Charges
Before signing a lease, you should know:
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What expenses are included in CAM?
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Are there caps on CAM increases?
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How often are charges reconciled?
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Are major capital repairs passed through to tenants?
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Can you review prior years’ NNN statements?
Clear answers here prevent problems later.
The Bottom Line
Triple Net charges aren’t a trick — but they can feel like one if they aren’t clearly explained upfront.
A good commercial lease makes NNN costs transparent, predictable, and easy to understand. If you don’t fully understand how they’re calculated, you’re not ready to sign yet.
You’re in business to grow.
Your lease should support that — not surprise you.
