The Triple Net Lease, Explained End to End
Dwaine Clarke · NNN Deal Finder / GCT Commercial
Published July 16, 2026
“NNN” gets used loosely enough to cost people money. This is the precise version — what the structure is, the gradations that matter, and how each side should read one — with the full FAQ library as backup.
The three nets, and who carries what
A triple net lease shifts the property’s three operating cost buckets to the tenant: property taxes, property insurance, and maintenance/CAM. The landlord receives base rent as net income. Against a gross lease (landlord pays everything from a fatter rent) or modified gross (split by negotiation), NNN is the structure that makes a building behave like a bond — which is exactly why 1031 buyers and retirees dominate the buyer pool.
The gradient: NN → NNN → absolute → ground
The label on the flyer is marketing; the maintenance article is the truth. NN (double net): tenant pays taxes and insurance; landlord keeps roof and structure — common at auto-parts and older dollar stores, priced 25–50 basis points wider for the capital exposure. NNN: tenant handles operating maintenance too; roof/structure allocation varies deal by deal. Absolute net: everything, without exception, is tenant obligation — the mailbox-money standard. Ground lease: tenant owns its building on your land; you hold dirt and collect rent, with reversion upside decades out.
Reading a lease like a buyer
Six clauses decide most of the value. The maintenance article (who owns the roof, the structure, the parking lot, the HVAC). Escalations (10%-per-five is the retail standard; flat legacy paper prices differently). Options and any termination rights (a Walgreens “75-year” lease is really its firm term). Assignment and subletting (how weak can your counterparty legally become?). Casualty and condemnation (who rebuilds, who can walk). And estoppel obligations (your resale depends on the tenant confirming the deal in writing). None of this is exotic — it’s an hour of careful reading that changes bids by six figures.
Where NNN goes wrong
Predictable places: buying “NNN” that’s contractually NN with a 20-year-old roof; above-market rent from a sale-leaseback that resets down at renewal; strong-credit tenants in re-lease-proof buildings; and CAM caps or landlord-liability edges hiding in reimbursement language. Every one is visible before closing to whoever actually reads — the argument, as ever, for representation that reads for a living.